Kite, who won the 1992 U.S. Open at Pebble Beach, opened with a birdie on the third. He faltered to a bogey at the next however. The 19-time winner on the PGA Tour atoned for that error with a birdie on the par-4 fifth.
The 55-year-old Texan moved to 7 under with a birdie on the par-4 eighth at Congressional. Kite ran off three straight pars from the ninth.
Kite, who owns seven wins on the Champions Tour, birdied the par-5 15th to get to minus-8. He joined the leaders at 9 under with a birdie on 16. Kite birdied the par-3 closing hole to move one stroke clear of the field after 54 holes.
'Obviously, I'm just pleased to be making some putts and getting into contention,' said Kite. 'This is the only reason that I took this little challenge to come back and play the tour was to challenge myself and put myself in a position to see what I could do, to see if I had what it takes to contend, to have what it takes to possibly win a tournament.'
This is the last year Kite could use a one-year exemption for being in the top-50 on the PGA's all-time money list. His last win on the PGA came at the 1993 Los Angeles Open. The last time he held the 54-hole lead was at the 1997 Greater Greensboro Chrysler Classic, where he tied for seventh.
'If I had not acted on the exemption, it's gone, so I decided to act on it,' Kite said. 'I truthfully did not know how many tournaments I would play on the PGA Tour versus the Champions Tour. I was shooting for about a 50/50 split or close to that.'
Scott played the front side in 1 over after a birdie on the sixth and bogeys at four and eight. The Australian moved back to 7 under with a birdie on the 10th. He closed with birdies on 15 and 18 to share second place.
Appleby, who owns six PGA Tour wins, got off to a fast start with birdies at one and two to move to minus-5. The Australian birdied the two front nine par-5s, Nos. 6 and 9, to get 7 under. The 34-year-old finished with birdies on 16 and 18 to end at minus-9.
Donald ran off three consecutive birdies from the par-4 fourth to jump to 8 under. He moved into a tie for the lead at minus-9 with a birdie on the ninth. The Englishman bogeyed the 13th, but ended with a birdie on 18 to finish at 9 under.
Westwood wrapped birdies at one and three around a bogey at the second. The Englishman birdied the par-3 seventh to get to 9 under. The 32-year-old tripped to a bogey at nine. Around the turn, he birdied the 13th before parring his final five holes.
Els, who owns 15 PGA Tour titles, had a hot front nine. He birdied the first, then carded back-to-back birdies from five to get to minus-9. The South African moved into a tie for the lead with a birdie on the ninth.
The 35-year-old stumbled to bogeys on 11 and 14 to slide back to 8 under. Els got one stroke back with a birdie on the par-5 15th to close a round of 3-under 68.
'I'm in a nice position. I played pretty well the front nine, and then on the back nine I got myself out of position a couple of times,' said Els. 'It cost me a couple of bogeys here and there, but I feel like I'm still swinging well. The putter is coming around nicely, so that's a good sign.'
Elkington, who won the 1995 PGA Championship at Riviera Country Club, cruised out of the gate with four straight pars. He rolled in his first birdie putt at the fifth to get to 8 under.
The Australian posted seven consecutive pars around the turn. Elkington drained his second birdie attempt at the par-4 13th to get to 9 under. He parred his final five holes to close a bogey-free round.
Robert Allenby, the second-round leader, struggled to a 1-over 72. He shares eighth place at 8-under-par 205 with Alex Cejka, Ben Crane, Zach Johnson, Phil Mickelson, Rory Sabbatini, Brett Wetterich, Sergio Garcia and first-round leader Matt Gogel.
World No. 1 Vijay Singh posted a 3-under 68. He stands in a tie for 30th at 5-under-par 208.