The two Britons were given a wild ovation by the crowd who saw a third Briton Lando Norris of McLaren take third to deliver the first one-two-three by British drivers at their home race.
It was the first British triple top in qualifying at any race since the 1968 South African Grand Prix.
Russell grabbed pole in one minute and 25.819 seconds to beat seven-time champion Hamilton by 0.171 seconds in the final minute as the track improved, the trio leaving series leader and three-time champion Max Verstappen to qualify fourth in his slightly damaged Red Bull.
Oscar Piastri was fifth in the second McLaren ahead of Nico Hulkenberg of Haas, Ferrari’s Carlos Sainz, Lance Stroll of Aston Martin, Alex Albon of Williams and two-time champion Fernando Alonso in the second Aston Martin.
Norris admitted that he had made a mistake on his final lap, which led to him aborting it, while Hamilton said it was a "huge" reward for the team for their work to recover competitive form and congratulated Russell.
Russell said that it was down to the Silverstone fans who had braved miserable weather to see a British triumph.
"What a crowd and what energy!" he said over the team radio.
Later the winner in Austria last time out added: "What a feeling, at the start of this year I don't think we could of even dreamt of being on pole here, one-two for me and Lewis, and Lando it's just mega.
Luckless Perez
After a morning of blustery winds and heavy intermittent rain, not to mention a lively rumour mill, the session began in watery sunshine.
The luckless Sergio Perez, on softs, spun off into the gravel at Copse and out of the session in his Red Bull.
His future with the team was the subject of much speculation beforehand and this intensified with this latest misfortune. It was his third Q1 exit of the season after similar in Monaco and Canada.
Perez had contributed only 15 points for Red Bull from the last five races – they totalled 116 thanks to Verstappen – and this prompted McLaren boss Zak Brown to suggest his fallibility was enabling McLaren to bid for the teams’ title.
The Q1 session was red-flagged for nine minutes before the action resumed with Sauber’s Valtteri Bottas going top by five seconds before others on slicks clocked improved ‘slick’ times as rain approached.
In the midst of this, Verstappen went off at Copse, but recovered, falling to an endangered 15th before responding in a frantic finale which saw Bottas, Kevin Magnussen of Haas, Alpine's Esteban Ocon and Pierre Gasly eliminated along with Perez.
The Williams cars led the way into Q2, Logan Sargeant under pressure to keep his seat, with all on slicks. On his first run, Verstappen, carrying damage, was only seventh as Norris and then Alonso set the pace ahead of Sainz and Hamilton.
In drying conditions, Sainz, Piastri Hulkenberg, Russell and Norris went top as everyone improved, Verstappen falling to 11th from where he rescued himself to go sixth.
A late surge by Stroll saw Leclerc drop to 11th and miss Q3 along with Sargeant, RB’s Yuki Tsunoda, Zhou Guanyu of Sauber and Daniel Ricciardo in the second RB.
Albon, Verstappen and Piastri were first out for Q3, as the sun struggled to shine, but it was the British trio again, Russell, Norris and Hamilton who topped the first flying runs ahead of Piastri and Verstappen.
Russell led by 0.006 seconds, a blink, as they returned on fresh rubber for the final laps when after Norris pulled out to pit and Russell went top in a Mercedes one-two, with Norris third and Verstappen fourth.
It was the first time three British drivers had taken the top three places in qualifying at their home event and for Russell the second pole of the season, having done the same a week earlier in Austria.
