Duval stands at 10-under 132, two strokes clear of fellow American David Gossett, who shot 66 at the Dunlop Phoenix Country Club.
Duval turned 30 on Friday and the gallery sang Happy Birthday to him in English.
Australian Aaron Baddeley is three off the pace after a 66, as is Japan's Taichi Teshima (67).
Defending champion Shingo Katayama (65) of Japan is four back, tied with Americans Jerry Kelly (66) and Edward Fryatt (69).
News and Notes from the Dunlop Phoenix Open