The Orlando-based sank in a six birdies -- three in each nine -- to total six-under 204.
The other Indian in fray, Jeev Milkha Singh too did well with a two-under 68 that helped him rise to the tied 23rd spot with a total of two-under 207.
Atwal, who has been battling injury breakdowns and poor form for the past one year, was in sparkling form and struck a birdie-hat-trick, gaining shots on the fifth, sixth and seventh, to make the turn three-under.
The Indian continued his fine form in the backward journey as well and picked up birdies on the 12th, 14th and 15th holes to round off a brilliant day.
Like Atwal, Jeev too played out a bogey-free front nine studded with back-to-back birdies on the third and fourth.
On his way back, Jeev found a birdie on the 10th but stumbled to a bogey on the 17th.
At the top, Australian Jason Day (67) took a sole two-stroke lead with a total of 12-under 198. American Blake Adams (70) followed him at the second spot.