The 9-under-par 135 tied the 36-hole record for this event, when it has been contested on a par-72 layout. Karrie Webb originally set the mark in 1997, while Catriona Matthew equaled the number in 2001.
Beth Daniel, the 47-year-old American who became the oldest winner on the LPGA Tour last year, shot a 3-under 69 and is tied for second place. Seol-An Jeon, who also carded a 69, and Jeong Jang, who shot a 68, joined Daniel at 6-under-par 138.
Defending champion Annika Sorenstam was in the hunt Friday, but stumbled late. Stupples already posted her 9-under-par total so Sorenstam knew what she needed to do when she teed off.
She tallied three front-nine birdies to get within two, but a pair of late bogeys and zero birdies on the back nine dropped her down the leaderboard.
Sorenstam, who can join Mickey Wright as the only players to successfully defend all four major titles, only managed a 1-under 71 and is part of group in fifth at minus-5.
'I still shot under par, so I have to look on the bright side,' said Sorenstam, who captured her second consecutive LPGA Championship title last month and repeated at the U.S. Women's Open in 1995-96 and at the Nabisco Championship from 2001-02. 'I lost a little ground, but then again I'm right there. There's two more days. It's not the end of the world by any means.'
Sorenstam will have to catch Stupples, a feat she accomplished last week.
Stupples, who won the season-opening Welch's/Fry's Championship with a historic, four-round total of 258, carded seven birdies in a flawless round on Thursday. Friday's round was also mistake-free, but thanks to different conditions, offered fewer birdies.
At the par-5 opening hole, Stupples knocked a 7-wood to 40 feet. She two-putted for birdie to reach 8 under par for the championship.
After one birdie in one hole, things cooled off for the 31-year-old from Dover, England. Stupples found a greenside bunker at the seventh and had little green to use. She blasted out to 8 feet and sank the par-saving putt.
'It was very, very boring,' admitted Stupples. 'Fairways and greens most of the way around today. And then if I missed the green, it was just on the fringe where I could putt real easily or chip real easily.'
Stupples gave herself good looks for birdie at the ninth and 10th. Her birdie try at nine never grazed the hole, but her putt at No. 10 circled the cup before rimming out.
Stupples parred her next six holes, then broke into red figures again at the 17th. She tried to run a 5-iron back to the hole, but due to overnight rain, the ball never got to the flag. Instead, Stupples drained the 40-foot birdie putt to get to 9 under.
So, is a two-birdie, no-bogey round boring?
'It can be,' said Stupples. 'It was frustrating at times, but I had a couple of good opportunities, they just didn't go in the hole. But I think if you can come through today and still be under par, even though things don't quite go according to plan, it's a good day.'
Stupples is bogey-free for the tournament and for the second week in a row, owns the 36-hole lead. At last week's Evian Masters, Stupples stumbled and came in fourth and this is her first reasonable chance at one of the majors.
'It's worked very well the last couple days,' said Stupples, referring to her strategy. 'I'll just be patient and see how it all pans out.'
Laura Davies needs a victory this week to become eligible for the Hall of Fame. She posted a 3-under 69 and is tied for fifth with Sorenstam, Laura Diaz (69), Jung Yeon Lee (72), Rachel Teske (69), Natalie Gulbis (71), Heather Bowie (69) and Paula Marti (66). That group is through two rounds at 5-under-par 139.
The 36-hole cut fell at 2-over-par 146 and among the notable players who will sit out the weekend are: Rosie Jones (148), Mi Hyun Kim (148) and reigning U.S. Open champion Meg Mallon (150).