It was a disastrous race for the Silver Arrows. Lewis Hamilton started badly from pole, ran off track to drop to 10th on lap one, and later took a drive-through penalty for a collision with Ricciardo, before eventually coming home in sixth.
Team mate Nico Rosberg was set for second, until a late coming-together with the charging Ricciardo at Turn 1 - deemed a racing incident by the stewards - gave him a left-rear puncture and dropped the German to eighth at the flag.
From the outset, it was a race of drama and penalties. Vettel jumped into the lead from the start, with Kimi Raikkonen riding shotgun after slipping ahead of Rosberg in Turn 2. Hamilton was fourth by Turn 2, but worse was to come - he put a wheel on the dirt under braking for Turn 6, had to crawl through the gravel, and was suddenly 10th.
By the exact midpoint - lap 35 in a race shortened to 69 after the first start was aborted when Felipe Massa's Williams was found to be out of position on the grid - Ferrari were in the pound seats with Vettel leading Raikkonen by eight seconds and an off-form Rosberg a further 11.8s back, unable to make an impression on the Prancing Horses' advantage. Hamilton's efforts, meanwhile, had seen him climb to fourth, another 14s back.
Nico Rosberg (GER) Mercedes AMG F1 W06, Lewis Hamilton (GBR) Mercedes AMG F1 W06, Sebastian Vettel (GER) Ferrari SF15-T and Kimi Raikkonen (FIN) Ferrari SF15-T at the start of the race at Formula One World Championship, Rd10, Hungarian Grand Prix, Race, Hungaroring, Hungary, Sunday 26 July 2015. © Sutton Motorsport Images
Then came the biggest threat Vettel would face all afternoon. Heading down to Turn 1 on the 42nd lap, the front wing of Nico Hulkenberg's Force India sheared off, showering a following Ricciardo with debris and sending the hapless German out of seventh place and into a high-speed meeting with the tyre wall. He missed Valtteri Bottas's Williams by centimetres, and fortunately climbed shaken but unharmed from the wreckage.
At first the Virtual Safety Car was deployed, but two laps later the real thing came out as there was too much debris to be cleared away.
By this stage Raikkonen was already suffering with MGU-K problems, which were hurting his pace massively. His healthy advantage over Rosberg wiped out, the Finn was a sitting duck on the straights and was passed by numerous cars before Ferrari ultimately made the call to retire him - a cruel end to what had been a very assured drive.
Raikkonen's woe was Rosberg's gain, with the German now thrown a lifeline. He had been struggling on medium tyres while those around him were on softs, but that meant he could switch to the softs for his final stint, on top of benefitting from closing right back up with Vettel. When he pitted, however, a new set of mediums were fitted, and while he picked off Raikkonen with ease, he didn't quite have the pace to unseat Vettel.
Into the final laps, and Rosberg was now under attack from Ricciardo, who came from behind to snatch victory here so memorably last year. Unlike Rosberg, the Australian had opted for the soft rubber, and wasn't in the mood to leave anything on the table. With five laps to go he lunged down the inside of Rosberg into Turn 1, but Rosberg had the cut back, and as they exited the corner they touched. Rosberg sustained a punctured right-rear tyre and limped to the pits, while the Red Bull driver sustained front wing damage and was forced to pit for a replacement.
Watch: Hulkenberg's spectacular wing failure
That put Daniil Kvyat up to second place after a strong drive in the second Red Bull, when his race had appeared to be compromised earlier on by a flat-spotted front tyre. The Russian got 10s added to his race time as penalty for exceeding track limits when he overtook Hamilton at the restart in Turn 4, but with Ricciardo's problem he was able to retain second, and thereby secure his first podium finish.
Ricciardo recovered to third, and there was more good news for Dietrich Mateschitz and Renault as Max Verstappen scored his best result with an excellent fourth for Toro Rosso.
There was also good news for McLaren, with Fernando Alonso fifth and Jenson Button ninth, adding a much-needed 12 points to their tally.
Alonso had been an almost permanent fixture in the top 10 during the race, but his rise to fifth owed something to others' travails - including Hamilton, who finished just 2.9s down the road.
Like Rosberg, the Briton appeared to have been thrown a lifeline by the safety car - but he ended up going backwards. Struggling for traction, he was attacked by Ricciardo around the outside at Turn 1, and simply slid into the Red Bull driver, damaging his front wing. His momentum lost, he was then attacked by a slew of other cars including Kvyat, before he was able to pit for a new nose, when he also took the chance to switch back into softs.
No sooner had he emerged however than he was given a drive-through penalty for the Ricciardo contact, and by the time he'd served that he was down to 12th. He hacked his way back to sixth, but it was a day of damage limitation - and complete contrast to the manner in which he had dominated practice and qualifying.
Romain Grosjean had an adventurous afternoon of his own but salvaged seventh for Lotus, just fending off Rosberg who recovered to eighth ahead of Button. Marcus Ericsson took the final point ahead of Sauber team mate Felipe Nasr.
The race was a disaster for Williams, with Massa's afternoon being ruined by a five-second penalty for being out of grid position and struggling with the handling after a slow pit stop.
Bottas was at least looking stronger, but was an unfortunate victim of the melee at the restart - as Kvyat and Hamilton squabbled through Turn 4, Bottas had to take avoiding action, but was then tagged by Max Verstappen's Toro Rosso as the quartet headed into Turn 5. A rear puncture, and a 12th-place finish, were the result.
Massa was two spots further back, as Williams sandwiched the hapless Pastor Maldonado. The Lotus driver picked up a hat-trick of penalties, for speeding in the pit lane, speeding behind the safety car, and tapping Sergio Perez into a spin at Turn 1 on lap 19.
Perez eventually joined Hulkenberg in retirement, while Carlos Sainz failed to finish after losing power with his Toro Rosso. Raikkonen was also withdrawn late on after attempts to reboot his MGU-K in the pit lane failed, while Marussia retired Will Stevens four laps from the flag. Team mate Roberto Merhi was 15th on what was an incredibly tough and emotional weekend for Jules Bianchi's old team.
After the breathless action, Hamilton retains his points lead, with 202 to Rosberg's 181, but Vettel is getting closer, with 160.
Mercedes, meanwhile, have 385 points to Ferrari's 236, but Red Bull are closer to Williams' 151 with 96.
