Bland's 63, his lowest round since joining the Senior Tour in 1995, set a new course record at Glen Oaks Country Club.
Hale Irwin, a first-round co-leader, shot a 3-under 68 and is tied for third place with Jose Maria Canizares, who posted a second-round 66. The duo stands at 8-under-par 134.
Bland used a 5-iron at the 175-yard 16th hole to record his first ace on the Senior Tour since the 1996 Senior PGA Championship. The hole-in-one, the 20th of his professional career, gave him sole possession of first at 10-under-par.
'I told myself at 16 to just put it left of the flag,' said Bland, a five-time winner on the 50-and-over circuit. 'I was just trying to get in at 8-under and it went in. There was a lot happening out there. There were lots of us tightly perched. That ace was a real bonus.'
Bland collected two early birdies at the third and fourth holes. He then wedged his approach to a foot at the eighth to set up a birdie and made the turn at 3-under 32 for the day.
The South African played well out of the gate on the second nine with a 12-foot birdie at the 10th and three-footer on No. 12. He parred the next three before the ace, then drained a 25-foot birdie putt on the last to extend his lead to two.
Bland will be in search of his first win on the Senior Tour since the 1996 Transamerica. The 56-year-old knows that a two-shot lead is not safe unless he plays aggressively on Sunday.
'You've got to set a target score,' said Bland, who shot 64 twice on the elder circuit, most recently at the 1999 Pacific Bell Senior Classic. 'These greens are so good. I'll need a 66 or 67 tomorrow. Lots of good players are up there near the lead.'
Gilder broke out early Saturday with four birdies in his first seven holes. He ran into trouble at the par-5 ninth when he left two shots in the bunker and walked away with a bogey.
The 2001 Senior Tour Rookie of the Year traded a birdie for bogey on the back nine until a birdie at the 15th moved him to 8-under-par. Gilder hit a 9-iron to six feet for birdie at the 18th and second place by himself.
'I started real well today,' said Gilder, who shot a second-round 66. 'I'm not in a bad place. If I can play as good tomorrow as I did today, I'll have a good chance. You can make a lot of birdies on this course. It's pretty vulnerable.'
Full-field scores from the Allianz Championship