Lewis Hamilton made it two from two in Hungary as the McLaren man was the only driver to break into the 1:21s before the rain came down.
With the track temperature a sweltering 45'C, Bruno Senna posted the first time of the afternoon, a 1:27.605. The Williams driver, though, was soon overhauled by Pastor Maldonado and then Nico Rosberg as the drivers were quickly down to business.
Kamui Kobayashi was the next to hit the front before he was overhauled by Romain Grosjean and then Kimi Raikkonen. The P1 time was down to a 1:22.950 after the first ten minutes.
There were problems for the Finn's team-mate as Grosjean lost his front wing when he crashed nose first into the armco barriers after putting his E20 into a slide.
With Raikkonen holding onto the P1 slot despite being in the pits, Jenson Button, Fernando Alonso, Felipe Massa and Lewis Hamilton fought over second place as the McLarens and Ferraris traded blows as they carried out their afternoon's programmes.
Alonso was the next to lead the way with a 1:22.899. His time was edged by Felipe Massa who went 0.068s quicker.
Jenson Button was the first of the big names to head out on the soft tyres. The McLaren driver was P4, 0.132s behind Massa, at the time but crossed the line over four seconds down on his previous best. His third flying lap on the softs put him P1 with a 1:22.747, 0.084s up on Massa.
This - coupled with the threat of rain - prompted others to head out on the soft tyres with Alonso immediately quickest with a 1:22.582. Raikkonen improved to third while Massa stayed fourth.
Raikkonen continued lapping and hit the front with a 1:22.180 while Hamilton climbed to second and Alonso upped his pace but stayed third. All the time the track temperature was dropping, down to 40'C midway through the session.
With a few drops of moisture falling Hamilton took the P1 slot with a 1:21.995 while Raikkonen was second ahead of Bruno Senna, Massa, Alonso and Button. The action, though, came to a temporary halt as the rain came down, sending the drivers scurrying back into the pits.
After a ten minute delay Vergne, who has won races at the Hungaroring in the past but of course never in F1, headed out on the full wet tyres but pitted after one lap while Schumacher went out on the intermediates - and crashed!
Schumacher aquaplaned on the wet track surface on a downhill and just slid into the barriers. The run-off offering absolutely no grip as he looked to be sliding on ice.
Despite the German's shunt more drivers headed out for some wet running as rain is forecast for Sunday's Hungarian GP. One driver who tried to get out was Button, however, instead he came to a stop at the end of pit lane and had to be pushed back by his mechanics. Button, though, was soon back in the action.
But, because of the wet surface, none of the drivers were able to impact the timesheets although they definitely tested the track's limits and the run-off areas.
01 Lewis Hamilton McLaren 1:21.995 20 laps
02 Kimi Raikkonen Lotus 1:22.180 0.185 20 laps
03 Bruno Senna Williams 1:22.253 0.258 34 laps
04 Felipe Massa Ferrari 1:22.417 0.422 29 laps
05 Fernando Alonso Ferrari 1:22.582 0.587 22 laps
06 Jenson Button McLaren 1:22.747 0.752 17 laps
07 Paul di Resta Force India 1:22.794 0.799 23 laps
08 Sebastian Vettel Red Bull 1:22.824 0.829 18 laps
09 Romain Grosjean Lotus 1:22.922 0.927 12 laps
10 Michael Schumacher Mercedes 1:23.160 1.165 19 laps
11 Nico Rosberg Mercedes 1:23.164 1.169 29 laps
12 Pastor Maldonado Williams 1:23.337 1.342 26 laps
13 Nico Hulkenberg Force India 1:23.713 1.718 26 laps
14 Mark Webber Red Bull 1:23.814 1.819 17 laps
15 Kamui Kobayashi Sauber 1:23.841 1.846 28 laps
16 Jean-Eric Vergne Toro Rosso 1:24.328 2.33 25 laps
17 Daniel Ricciardo Toro Rosso 1:24.345 2.350 28 laps
18 Sergio Perez Sauber 1:24.623 2.628 23 laps
19 Vitaly Petrov Caterham 1:24.823 2.828 30 laps
20 Heikki Kovalainen Caterham 1:25.220 3.225 30 laps
21 Timo Glock Marussia 1:27.104 5.109 28 laps
22 Pedro de la Rosa HRT 1:27.106 5.111 19 laps
23 Charles Pic Marussia 1:27.185 5.190 24 laps
24 Narain Karthikeyan HRT 1:27.822 5.827 20 laps