McIlroy carded consecutive rounds of 75 with his expensive new clubs 12 months ago to miss the halfway cut, but looked back to his major-winning best on Friday with a sparkling 67 which left him seven under par and just two shots behind halfway leaders Craig Lee and Rafael Cabrera-Bello.
A back nine of 31 had playing partner and Open champion Phil Mickelson full of praise for McIlroy's game, the left-hander saying: "The back nine was really impressive, a beautiful nine holes of golf. He is really striking the ball well. His game looks really sharp and his driving was impeccable."
It took until December and a thrilling duel with Masters champion Adam Scott for McIlroy to register his first - and only - win of 2013 in the Australian Open, but the former world number one is now favourite to taste victory in his opening event of 2014.
"It would be nice to win your first start of the season rather than your last start. It's exactly what I wanted," the 24-year-old said. "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."
England's Danny Willett was a shot behind the leaders on eight under after a second round of 63 which was just one shot outside the course record.
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.
"On Friday I played nicely, 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."