Defending champion D.A. Weibring posted a 5-under 67 to join Wayne Levi in a tie for second place. Doug Tewell followed at 4-under-par 68.
Stadler has won his last two starts on the Champions Tour to take the lead in the money race. He doesn't seem to be losing any steam this week despite a slow start on Friday that saw him par his first five holes until he found trouble with a bogey at the par-4 sixth.
The 51-year-old recovered well with an eagle at the par-5 seventh to make the turn at 1 under. Stadler then came out firing with a birdie at the par-4 10th after his second shot stopped within 15 feet of the hole.
'I got off kind of shaky the first five or six,' said Stadler. 'But it's kind of what I've been doing. When I've been making mistakes I came right back and eagled the next hole.'
Stadler then birdied the 11th and picked up a birdie at the 12th to make it three in a row.
At the par-4 15th, Stadler dropped his approach inside 2 feet and converted the short birdie putt. He then finished strongly with birdies on each of his last two holes to secure the outright lead.
'The days that I make some putts are the days I score well,' said Stadler. 'I'm hitting it pretty good.'
Weibring, who earned his first career victory on the Champions Tour at this event last year, tallied a pair of birdies on the front nine and added a birdie at the par-3 11th to reach 3 under.
Weibring parred his next four holes before playing his second shot to 9 feet for a birdie at the par-4 16th. The 51-year-old then birdied the 17th for his share of second.
'I got off to a good start today,' said Weibring. 'We're all kind of posturing for those points at the end of the year.'
Levi had a quiet start to his round with pars on each of his first eight holes before picking up a birdie at the ninth. Levi made a move on the back side, however, and ran off back-to-back birdies from the 12th to move to minus-3.
The 52-year-old reached the par-5 17th in two and two-putted for another birdie. Levi then knocked his approach inside 7 feet for a birdie at the last to finish two shots back.
Larry Nelson, Gary McCord, Stewart Ginn, Des Smyth and John Harris share fifth place at 3-under-par 69.
Ray Floyd carded a 70 to join Tim Kite, Jay Sigel, Dave Barr, Joe Inman, David Eger and Bob Kirkendall at 2 under par.