The Ferrari new boy, quickest at the Baku street circuit yesterday, saw off team-mate Sebastian Vettel by nearly two tenths.
Leclerc has enjoyed a strong start to his Ferrari career, and the 21-year-old Monegasque appears to hold the upper hand over Vettel here.
Ferrari have favoured the four-time world champion this season, subjecting Leclerc to three orders in as many races, but they could be forced to revise their strategy if their new driver puts his car on pole.
Hamilton, who leads team-mate Valtteri Bottas by six points in the title standings, looks set to have his work cut out to challenge the Ferrari's.
The 34-year-old finished a distant 1.5 sec behind Leclerc.
Red Bull's Max Verstappen, enjoying an upgraded Honda engine this weekend, placed third, 1.2 sec off the pace. Bottas was fourth.
George Russell missed second practice on Friday after he hit a drain cover at 180mph – his Williams destroyed.
But the 21-year-old Englishman in the spare chassis managed 20 laps, ending up 19th, three tenths slower than his team-mate Robert Kubica.