Vettel opened a three-second buffer to Bottas, with the picture still unclear as to whether a one- or two-stop strategy would be quicker.
Daniel Ricciardo won a sensational Chinese Grand Prix, cutting through the field in the closing stages like a knife through butter.
Lap 19: Bottas is called in to cover off Verstappen's surge on his fresh tyres. From there, he qualified sixth for Sunday's race but there was more drama to come.
The race took a dramatic twist when the safety vehicle was deployed following a coming-together between the Toro Rosso pair of Brendon Hartley and Pierre Gasly on lap 31.
The move that put Ricciardo into the lead.
Lap 35: Full race resumes.
The problems also come as the 28-year-old is considering his future with Red Bull, revealing earlier this week that he will wait until next month at the earliest to start talks.
Valtteri Bottas was second for Mercedes with fellow-Finn Kimi Raikkonen third for Ferrari.
Verstappen repassed Hamilton, this time cleanly, for fourth on track as he took the chequered flag but his penalty meant he was fifth.
Khloé's Childbirth, Cheating From Boyfriend To Be Aired On KUWTK
THe source continued , "Most of his friends and people in his circle also cheat and don't think there's anything wrong with it". "She is head over heels in love with her little girl - she is just consumed with love", a Kardashian family source said.
As the Red Bulls charged, Hamilton pointed out to his team in the pits that they had been caught out by not stopping to change what was the slowest tyre which already had significant life on it.
The German locked a wheel going into the hairpin on lap 43 and ran a little wide.
That promoted Hamilton to fourth while Nico Hulkenberg took sixth after Renault adopted the same strategy as the Red Bulls.
Lap 45: Ricciardo sneaks past Bottas for the lead of the race.
But the safety vehicle threw in a curve ball and Red Bull grabbed their chance.
The stewards agreed, hitting Verstappen with a 10-second time penalty.
Lap 48: Verstappen passes Hamilton for the second time in seven laps.
Before the race Verstappen's team had reminded him not to get caught up in any incidents following a series of poor decisions in the first two races of the season. Vettel never recovered from the hit from Verstappen and lost seventh place to McLaren's Fernando Alonso on the penultimate lap before almost losing eighth to Carlos Sainz.
It got worse for Vettel as his worn tyres and sidepod damage cost him performance, and a late aggressive move from Fernando Alonso relegated him further.