Chez Reavie (67) and John Mallinger (65) are knotted in second place at 11- under-par 131.
Hughes, an Australian who played on the PGA Tour last year, flew out of the gate on Friday. He knocked an 8-iron to 2 feet to set up birdie at the first, but gave the stroke back at the second when he missed a 6-foot par putt.
Hughes parred his next six holes, but closed his front nine with a birdie. He missed the green with his drive at the reachable par-4 ninth, but chipped to 4 feet and drained the birdie putt.
On the second nine, Hughes reached the par-5 10th green with a 7-iron second shot. He two-putted from 40 feet for a birdie to get to 9 under par for the championship.
Hughes parred 11 and 12, then rolled in a pair of 12-foot birdie putts at the 13th and 14th holes. He two-putted for a birdie at the par-5 17th to take sole possession of first place.
'I hit the ball quite good off the tee,' said Hughes. 'The pins were a little trickier today and it made it difficult for low scores. My scoring is coming from my putting.'
Hughes is struggling this season on the Nationwide Tour. He ranks 95th on the tour's money list and has only made five cuts in 13 starts, but something happened a few weeks ago.
Hughes played in the British Open at Royal Hoylake, and although he missed the cut, he left England with a new approach.
'I missed the cut, but it clicked my brain into gear,' he said. 'I have to hit some different shots instead of flying it in on every hole.
'I played decent this year, but I haven't been able to make any putts or chip it close. I've been threatening some low scores this year, but my chipping has been holding me back. I've been recovering much better this week and chipping well this week. I'm very happy.'
Cliff Kresge (63), Paul Sheehan (63), former Ryder Cupper Chip Beck (64), Kevin Stadler (63), Bryce Molder (67) and overnight co-leader Doug LaBelle II (69) are tied for fourth place at minus-10.
Michael Long, who shared the first-round lead with LaBelle, only managed a 1-under 70 on Friday and is part of a group tied for 10th place at 9-under-par 133.
The 36-hole cut fell at 5-under-par 137 and 69 advanced to the weekend.