Lee had four birdies and one bogey on the first day of stroke play at Carmel Country Club. The 17-year-old native of San Carlos, Calif., missed the cut at the U.S. Women's Open earlier this month, carding a two-day total of 23-over-par.
Kelsey Lindenschmidt and Maria Jose Uribe are each tied for second place, while seven players are at minus-1. Stacey Kim, Lindy Duncan, Ayaka Kaneko, Patty Chawalitmetha, Kristina Wong, Mindy Kim and Lila Barton are all two strokes behind Lee.
Fourteen-year-old MacKinzie Kline was granted the use of a golf cart because of a congenital heart defect. She shot even-par.
Madison Pressel, the younger sister of 2005 U.S. Women's Amateur champion Morgan, fired a 4-over 76 and is tied for 48th place.
Dakoda Dowd, who became the youngest player to compete in an LPGA tournament earlier this year at the age of 13, also shot a 76. Dowd receives plenty of attention and emotional support, as her mother, Kelly Jo, continues to fight breast cancer.
Eight-time Grand Slam tennis winner Ivan Lendl has a rooting interest in this tournament, as two of his daughters, Isabelle and Marika are playing. Isabelle Lendl is 2-over, while Marika is plus-5.
Tuesday marks the end of the first two rounds of stroke-play qualifying. The top 64 scorers will then start match play Wednesday and the event concludes on Saturday with a 36-hole match play final.
Last year, In-Kyung Kim defeated fellow 17-year-old In-Bee Park to win the event, which has proven to be a springboard for success for LPGA talent over the years. Past winners of this championship include Nancy Lopez, Hollis Stacy Amy Alcott and Pat Hurst. Stacy was a three-time champion while Lopez captured this event twice.