Australian Stoner, who has had to dismiss rumours that he will retire at the end of the season, led the way with a lap of one minute 38.396 seconds aboard his Repsol Honda.
Estoril is the only circuit on the MotoGP calendar that the 26-year-old Stoner has not won at in the premier class, and he left it late to claim top spot on Friday by edging out Yamaha's Ben Spies.
The American had been quickest during the damp morning session and was on the pace again in the dry afternoon running, beating his team-mate and championship leader Jorge Lorenzo for the first time this season.
The performance will be a major boost for Spies, who has endured an awful beginning to the season, only managing 11th place finishes in Qatar and Spain.
Crutchlow was next up on his Tech 3 Yamaha as the Coventry rider maintained his excellent start to 2012.
The Briton has two fourth-placed finishes to his name in 2012, and looks set for another strong weekend as he matched the leading challengers.
Crutchlow was just 0.3secs off Stoner's ultimate pace as he edged Dani Pedrosa and Lorenzo into fourth and fifth places respectively.
Alvaro Bautista was next up on the Gresini Honda but it was another difficult day for Ducati as Nicky Hayden and Valentino Rossi wound up in seventh and ninth positions.
Hector Barbera was a solid eighth on the Pramac Ducati, with Crutchlow's team-mate Andrea Dovizioso rounding out the top 10.
Randy de Puniet was the quickest of the new-for-2012 CRT machines in 13th on his Aspar Aprilia.
A delighted Crutchlow said: "I'm happy with the way we have started this weekend. This morning was similar to the first session in Jerez and we couldn't really learn anything with the track being so damp in parts.
"We never changed the tyres from this morning to the afternoon and that is a big plus. For that reason I'm really happy with the pace I was able to set, especially because we know that some other guys did put in a new tyre at the end to go a bit quicker.
"We were just concentrating on working on the race set-up and we still have plenty of margin to improve. The first two races have given me a lot of confidence and I am looking forward to carrying on the good start this weekend."