Kim Saiki, Cristie Kerr, Emilee Klein and Candie Kung share third place at 5-under-par 67.
Annika Sorenstam, the defending champion, struggled to an even-par 72 on Thursday. She hit her opening tee shot into the trees and struggled all day to salvage pars from difficult locations.
'I had to scramble a lot, hit it from under trees and make putts,' Sorenstam said. 'It's important to get off to a good start in a three-day tournament. I have to keep it low the next few days.'
Diaz, a two-time winner on tour last year, collected two birdies in her first three holes. She carded an eagle at the ninth thanks to a 45-foot putt that sent her around the turn at 4-under par.
She kept the strong play going with a two-foot birdie at the 10th and 15-footer at No. 11. Diaz dropped a stroke to par at the par-3 17th when she three-putted from 30 feet but rebounded with a eight-foot birdie at the par-5 closing hole.
'That was great. I made a few birdies after the turn and I just felt good out there,' said Diaz. 'I made a couple of par saves coming down stretch and then unfortunately I three putted 17. I was able to birdie 18 and finish with a smile on my face. It feels good to finish under par again and be able to roll some putts in, which I really haven't felt lately. It is a good feeling to have, so I need to go out and make some more putts.'
Diaz wore a cumbersome ankle brace throughout her round Thursday. She sprained her ankle in college and it never properly healed but the injury was re-aggravated two weeks ago when the tour stopped in Los Angeles.
'Last week in Los Angeles I did a little jumping in my workout routine and next morning I wasn't able to walk that well,' said Diaz. 'I feel like I am carrying around 10 extra pounds on my ankle, but I am not having any pain like I was in L.A., so I am very happy about that.
'I will play until I can't walk basically. That is my theory - smart or stupid.'
Matthew got off to an amazing start with a four-foot eagle at her first hole, the par-5 10th. She birdied the 12th but tallied a pair of bogeys over her opening nine to fall to 1-under par.
Matthew went on a birdie tear on her second nine. She chipped in for birdie at one, holed a pair of 12-footers at two and three, sank a six-footer at eight and drained a 12-footer at nine to match Diaz in first.
'It was very breezy and the wind was swirling, especially on the back nine holes,' said Matthew. 'I really played well, kept it in the fairway and had no bad swings.'
Kelli Kuehne is alone in seventh place at 4-under-par 68. Rosie Jones, Soo- Yun Kang, Akiko Fukushima, Jackie Gallagher-Smith, Vicki Goetze-Ackerman and Se Ri Pak share eighth place at minus-3.