Baddeley, who won the Australian Open as an 18-year-old amateur in 1999, fired his second-straight 3-under-par 69 Friday to tie New Zealand's Greg Turner for the halfway lead in Melbourne.
At 6-under-par, Baddeley and Turner are two shots clear of Australian Scott Laycock. Five players share fourth place at 3-under, including Robert Allenby, Nick Faldo and Greg Norman. American Matt Kuchar, who is making his professional debut this week, followed up his opening 69 with a second-round 75 to fall to even par for the tournament.
Friday, Baddeley was almost as flawless as the weather. Now 19 years old, and playing in just his second event as a professional, Baddeley carded four birdies to just one bogey to move to the top of the leaderboard.
'I hit a couple of errant tee shots, but my iron play was pretty solid and I putted well again,' Baddeley said. 'I was working hard on my game in the gym, and I knew it was only a matter of time before something happened and I started shooting some (low) scores.'
If Baddeley is to hoist the trophy come Sunday, he'll have to fend off his mentor for the second consecutive year. Five-time Aussie Open champion Norman just missed out on the title last year. Now, he's once again in position to tie Jack Nicklaus' record of six Australian Open championships.
'I feel comfortable with the position I'm in for the weekend. I played well and feel good,' said Norman.
At 3-under-par, Norman is tied with first-round co-leader Peter O'Malley, who shot 73 in the second round. O'Malley opened in 68 to tie Turner for the day-one lead. Turner remains at the top following a Friday 70. The 37-year-old Kiwi has won four times on the European Tour. He says the current crop of young pros is quite different from when he started.
'When I came up you spent most of the time chasing tail and getting drunk,' said Turner. 'They work out, they are fit, they don't drink, they've got nutritionists and psychologists and coaches.'
The cutline fell at 4-over-par. Two-time major winner Mark O'Meara failed to qualify for weekend play. The '98 Masters and British Open champion carded rounds of 76-74 for a 6-over-par total.