Mickelson had a front-row seat as McIlroy covered the back nine in 31 for a round of 67 which left him seven under par and just two shots behind halfway leaders Craig Lee and Rafael Cabrera-Bello.
"The back nine was really impressive, a beautiful nine holes of golf," said five-time major winner Mickelson, who returned a 70 to lie one under. "He is really striking the ball well. His game looks really sharp and his driving was impeccable."
It was all a far cry from the same event 12 months ago, when McIlroy's controversial multi-million pound switch to Nike was greeted with fireworks and fizzled out with a missed cut after consecutive rounds of 75.
"Coming off the last green last year I was deflated to say the least," admitted McIlroy, who endured a turbulent 2013 before finally claiming his first win of the season in the Australian Open in December.
The 24-year-old also proposed to girlfriend Caroline Wozniacki in Sydney on New Year's Eve and joked he had been hanging around tennis players too much after grunting with the effort of a recovery shot from the heavy rough.
That was the result of a rare wayward drive - another into a bush cost him a double-bogey on the sixth - but McIlroy has otherwise been delighted with his long game.
"Standing there 30 yards ahead of everyone else is nice," the former world number one said. "When you are confident with the driver it takes a lot of pressure off your game.
"I got a few putts to drop on the back nine which was nice and I feel like I have a great chance of winning.
"It would be nice to win your first start of the season rather than your last start. It's exactly what I wanted. It's a great way to test your game under pressure. With a strong start to the year you can really get some momentum."
Lee had set the clubhouse target on nine under par after adding a 67 to his opening 68, the 36-year-old looking for his first European Tour win after losing out to Thomas Bjorn in a play-off for the Omega European Masters last September.
"I think Santa has brought me a good putting stroke for Christmas," Lee said.
"My brother installed an astroturf putting green in my front garden at the end of last year and that's made a difference as I've been able to keep putting every day. It's 20 feet by 14 feet and the neighbours have been peering over the fence."
Bjorn was just two shots behind Lee on seven under after shooting his own 67, and Lee added: "I would like to take the two of us side-by-side in a play-off again."
The round of the day came from England's Danny Willett, who carded seven birdies and an eagle in his 63 to finish eight under par and continue a brilliant fightback.
Willett was five over par after 10 holes on Thursday, but played the remaining eight in four under and is a total of 13 under for his last 26 holes.
"To be honest I've not done a massive amount different," Willett said. "If you miss a fairway by two or three yards and get a bad lie you've got no way to get to some of these greens.
"Today I played nice, hit it a little closer and hit a few more fairways and rolled a few putts in. I holed a wedge from 50 yards on eight (for eagle) which helps and the last 20-odd holes have been pretty good."
England's Tommy Fleetwood made the most of his chance to impress Ryder Cup captain Paul McGinley, although he may not get the full benefit of his flawless 65.
As well as McGinley, Fleetwood was playing with fellow Nike professional Thorbjorn Olesen and the pair turned up in almost identical clothes, much to McGinley's confusion.
"He kept saying good shot but he never knew which one it was," joked Fleetwood, who won the Johnnie Walker Championship at Ryder Cup venue Gleneagles last year, four days before the qualifying race started, and was third in the Volvo Golf Champions last week.
"He kept throwing a name out there and we're like 'No, no, Paul, it was the other one.'
"I played with him in Holland last year as well and scrapped it around there for two days so to finally play some good golf is good.
"It's every single European golfer's dream to play in a Ryder Cup, you watch it every year on TV and get so motivated by it you want to go out and fight someone when you're watching it.
"It's the best sporting event in the world but at the moment it's one thing I am trying to keep at the back of my mind."