In pursuit of her first title on the US women's circuit, Kim fired a flawless four-under-par 68 to end a tough day for scoring at Mission Hills Country Club at seven-under 137.
The 21-year-old Korean, who has posted top-10 finishes in her first three starts this season, held a one-stroke advantage over major winners Cristie Kerr, Lorena Ochoa and Karen Stupples.
American Kerr eagled the par-five 11th on her way to a best-of-the-day 67, Mexican world number one Ochoa returned a 70 and veteran Briton Stupples carded a 69.
Twice champion Karrie Webb of Australia shot a 70 to share fifth place at five under with American Stacy Lewis (68) on a high-quality leaderboard.
"I had a great round and my swing was really smooth and comfortable," a smiling Kim told reporters after recording four birdies on a fast and firm layout flanked by thick rough.
"Also I had great putting today. Everything was good." Asked if she felt at all nervous holding the lead in the year's opening major, Kim replied: "Nope. It's different than a normal tournament ... but I had a lot of times this position, you know, so it's the same feel. I like it." Kim turned professional in 2006 and won five titles on that year's Futures Tour, the feeder circuit for the LPGA Tour.
Stupples put herself in position to clinch a second major victory after making the most of a birdie-birdie start.
The 36-year-old, who became only the third Englishwoman to claim a major at the 2004 British Open, was delighted to be in contention at one of her favorite events.
"I love it here," said Stupples, who has relished playing at Mission Hills since her first appearance in 2003. "I always get goose bumps when I come here. There's something special about this tournament. I've always wanted to win it." First-round leader Suzann Pettersen of Norway birdied the last two holes for a 73 and a tie for seventh at four under after battling on the slick greens for much of her round.
Fan favorite Michelle Wie, who has posted three top-10s at this event, carded a second successive 71 after another day of good ball-striking marred by poor putting.
"I feel like I'm not far off," said the 20-year-old Hawaiian, who will start Saturday's third round five shots off the pace.
"Obviously I'd want to be a lot lower at this point but there's two more days to go, 36 more holes. I just gotta make more putts." The cut fell at six over with Japan's Ai Miyazato, a double winner on the 2010 LPGA Tour, and American Natalie Gulbis among those missing out.
