It is his first pole in 128 grands prix, with the previously most recent coming in France in 2008.
The Finn's Mercedes team-mate Briton Lewis Hamilton failed to make progress from Q2 and missed the cut for the top ten shootout, qualifying 14th after a miserable afternoon. The triple champion will move up to 13th after compatriot Jenson Button's 15-place grid penalty is applied, however.
Raikkonen knows that it will be important to maintain track position on Sunday as he aims for his first win since his return to Ferrari, with overtaking likely to be an even bigger challenge in 2017 due to the wider nature of the cars this season.
Now the German is six points ahead of Hamilton in the Driver's Championship.
"It's obviously a great day for the team.great to get the points, great to get the win", said Vettel.
"Hopefully I get up to speed as quick as I can", he said in the final minutes before the green flag.
But he was tempering expectations ahead of the main event on Sunday afterwards, saying: "It's the best place to start but it doesn't guarantee anything". The Formula 1 Grand Prix of Monaco race will. "I'm very happy about it today but I can understand he's upset".
Valtteri Bottas made it through to Q3 and was just a whisker off the front row.
"I'll try and get up as high as I can but it's hard to overtake here, as you know". Vettel starts the race on the front row alongside teammate Kimi Raikkonen. "The opportunity wasn't really there for me".
Bottas says Ferrari's ability to get the ultra-soft tyre into the optimal operating window more quickly than Mercedes has given the Scuderia an advantage around Monte Carlo so far this weekend. We got back on track in FP3 and in qualifying the auto was the best I've had this weekend. "It's still second place but it doesn't count a lot in my books". When the time comes to assess I think there could be up to 10 drivers we would look at more closely. It was also the first time they have managed a one-two lock-out since the German Grand Prix in 2010, though that was perhaps not a race they will want to bring to the forefront of people's memories too soon.
"That's me out, right?" said Hamilton, deprived of a clean lap and condemned to qualify 14th, one of five men eliminated along with Russian Daniil Kvyat of Toro Rosso, German Nico Hulkenberg of Renault, Dane Kevin Magnussen of Haas and Brazilian Felipe Massa of Williams.