Kim used a 60-degree wedge from 60 yards to dig out an eagle on the sixth hole to key her maiden first-round lead. Despite beating Lorena Ochoa at the SBS Classic in February for her only win this season, she said Friday's round felt better.
'The shots I'm making are much better because I'm in Korea,' she said. 'I feel more confident I can play better in Korea than in the United States. Everything was good. Driver, putting, irons, everything was good.'
Paula Creamer and Koreans Hee-Won Han and Jeong Jang were in a six-way tie for third after shooting 68s at the 6,381-yard Mauna Ocean Golf Club. They were joined by Karine Icher of France, Britain's Lindsey Wright and South Korean Jin Joo Hong.
Kim, who tied for 23rd at last year's event, got off to a solid start on the back nine with birdies on holes 10 and 16. She then eagled the par-4 6th between birdies on the first and eighth holes.
Lee putted well and had seven birdies on the day.
'The most important thing for tomorrow is the putting,' Lee said. 'The breaks are tough to read and you have to check your speed.'
Han and Creamer also had a smoother ride on the back nine. Han, gunning for her second straight win after taking the Honda LPGA Thailand last week, double-bogeyed the par-3 7th, her only flaw in a round of six birdies.
Creamer bogeyed the fifth hole, but birdied holes 15-17 to get back into contention.
Sweden's Sophie Gustafson was a stroke behind at 69 and 2004 winner Grace Park fell into a seven-way tie for 16th with a 71. Seon-Hwa Lee, the 2006 LPGA Rookie of the Year, shot a 72.
Lee led last year's tournament wire-to-wire for her first-ever LPGA win.
South Koreans have won the event in all four years, starting with Se Ri Pak in 2002. If another South Korean wins this year, it will mark their 11th tour title of the season.
This year, there is an added incentive to perform well as it forms part of the 'Global Group' -- three Asia-based events in three weeks. Whoever amasses the most points at all three will automatically qualify for the ADT Championship at Trump International Golf Club in November. A record $1 million prize awaits the winner.