The 26-year-old Australian, driving with supreme aplomb, mastered the unforgiving Monte Carlo street circuit with a best lap in one minute and 13.622 seconds.
This was enough to beat both Mercedes drivers comprehensively, championship leader German Nico Rosberg winding up second behind him by 0.291 seconds and defending three-time champion Briton Lewis Hamilton third, after suffering another engine problem.
Four-time champion German Sebastian Vettel was fourth for Ferrari ahead of compatriot Nico Hulkenberg of Force India and Finn Kimi Raikkonen, in the second Ferrari.
"So I came into this weekend with a lot of confidence and a lot of belief that I could be in this position. I've always enjoyed this place, we've got a good package and it's nice to make the most of it."
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Rosberg said: "He was very fast and deserved it. We weren't fast enough..."
Ricciardo set his time on a set of 'super soft' tyres with greater durability than the 'ultra softs' used by his rivals - a likely tactical advantage in Sunday's classic 78 laps race.
Eight of the last 10 Monaco races have been won from pole position.
His Red Bull team-mate record-breaking Dutch teenager Max Verstappen crashed in the opening Q1 session and will start from the back of the grid.
Spaniard Carlos Sainz was seventh for Toro Rosso ahead of Mexican Sergio Perez of Force India and Russian Daniil Kvyat in the second Toro Rosso. Two-time champion Spaniard Fernando Alonso was 10th for McLaren Honda.
- Drama -
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On a beautiful blue-skied day, there was early drama in Q1 when Felipe Nasr's Sauber suffered an engine failure in the opening minutes, smoke pouring from his Ferrari power unit as he came out of the tunnel towards Tabac.