The South Korean notched up a bogey-free round at Aviara in which she birdied all four of the par-fives. Starting on the back nine, Lee opened with the a birdie and picked up further shots at the 14th, 16th and 17th to take the turn in 32.
After birding the first, Lee took possession of the lead with another birdie at the fifth, and closed her round out with a seventh birdie on her penultimate hole, the eighth.
One shot back is Yani Tseng who fired a 66. Tseng made a slow start to the day, paring her opening six holes, but a run of three birdies and an eagle at the 10th saw her climb up the leaderboard. A bogey at the 14th after a failed three-foot par putt briefly halted her progress, but birdies at 16 and 18 saw Tseng finish strongly.
A further shot adrift on five-under are world number one Lydia Ko, Karrie Webb, Cristie Kerr and Lin Xiyu.
Ko, who is looking for her third win of the season, took the turn in 33 and added two further birdies for a bogey-free round of 67.
A group of 10 players which includes Inbee Park, Stacy Lewis and Hyo Joo Kim are clumped together on four-under.
Michelle Wie, who has a close relationship with title sponsors Kia, notched up five birdies in her first nine holes to find herself in contention, but three bogeys on the back nine meant she was forced to settle for an opening 69.
Anna Nordqvist got her title defence off to a slow start with a level-par 72.