The Northern Irishman, who had missed the cut in his last three tournaments, looks to be getting his game on track just in time for the defence of his US Open crown in San Francisco next week with a five-under-par 65 for a total of 133.
"It's nice to see my name on that part of the leaderboard," the 23-year-old McIlroy said. "It's not nice when you're struggling to make the cut on a Friday afternoon.
"It's nice to be through to the weekend, obviously. It's obviously even nicer to be leading and have a great chance."
After dispensing the niceties, the world number two faced a tight third-round battle with three players tied for second on 134 and another trio two shots further off the pace.
Opening round co-leader Jeff Maggert, the 2006 winner, shot a second-round 68 to share second place with fellow Americans JB Holmes (64) and Kevin Stadler (65).
Tied for fifth were Americans John Merrick (69), Chad Campbell (67) and Kevin Kisner (66), with US Davis Cup captain Davis Love III, Ireland's Padraig Harrington, Noh Seung-yul of South Korean and American Ken Duke another shot away at 136.
Another shot adrift was two-time Major winner John Daly, who shot a second-round 69 on return to his former home course.
McIlroy carded an eagle and five birdies to offset two bogeys, and narrowly missed out on a second eagle when he lipped out a putt of less than four feet on the par-five 16th hole.
The Briton found the groove on his drives and fired away at the pins, knocking several approach shots close.
"I saw a lot of positive things out there," McIlroy said. "I felt like I drove the ball great on the last few holes and hit some great approach shots."
A birdie at the second hole followed by an eagle at the par-five third helped put McIlroy in the right frame of mind.
"Three-under through three holes gave me a little bit of a boost today," he said.
Earlier, Holmes had tore up the front nine to sit pretty at the top of the leaderboard after the morning section of play.
The 30-year-old Kentuckian, who has returned well after undergoing brain surgery last September, birdied the second and third holes and ran off four straight birdies from the sixth.
"I knew being dizzy, having headaches and everything that I couldn't keep my (tour) card, I couldn't play out here anymore, so I had to get something done," Holmes explained about deciding to have the surgery.
"It was almost a relief to find out that the surgery was something that could help the symptoms and everything."
Relief for McIlroy was turning around his run of form in time for his Major title defence at the Olympic Club.
"The goal this week was obviously to see some improvement, to get some competitive rounds and get into contention and I'm right there heading into the weekend," he said.
"It's going to be a great experience and a great way to prepare for the US Open next week."