Karrie Webb (65), Rachel Teske (67), Stefania Croce (68) and Michelle Ellis (69) share third place at 8-under-par 136.
Doolan began on the back nine Friday and wasted no time breaking into red figures. She drained a 20-foot birdie putt at 10 and added another birdie two holes later.
At the par-5 13th, Doolan knocked an 11-wood to 15 feet and converted the putt for eagle. She parred the remaining holes on her front nine for a 4-under 33.
Doolan knocked a wedge to six feet to set up birdie at No. 2 but made some mistakes midway through her second nine. She three-putted from 35 feet for bogey at the fourth and failed to get up and down for par from a bunker at the sixth.
Doolan got into the clubhouse on a positive note when she holed a six-foot birdie at the seventh to polish off her round. She grabbed a piece of the second round lead for the first time since the Champions Classic in 2001.
'I feel like I'm playing well,' said Doolan, who went on to win last year's Champions Classic for her lone victory on the LPGA Tour. 'It's coming together for me. It's coming together now.'
Ammaccapane, who shared the first round lead, played a different round compared to her flawless 66 on Thursday. She bogeyed the par-3 sixth hole but rebounded with back-to-back birdies at seven and eight.
Ammaccapane never recovered from a poor tee shot at the ninth and dropped another stroke to par to finish the front side at even-par 35.
She made her move back to the top of the leaderboard with solid play at the start of the back nine. Ammaccapane ran home a 10-foot birdie putt at the 10th and made a pair of four-footers for birdie at 12 and 13.
Ammaccapane bogeyed the par-5 16th but capitalized on the next par-5, the 18th. She hit a sand wedge to 20 feet and made the putt for a round of 3-under 69.
'I don't know what happened,' said Ammaccapane. 'I didn't hit it bad, but I didn't hit it as good as yesterday. All in all, 3-under is a pretty good today.'
Joanne Morley and Val Skinner share seventh place at 7-under par. Barb Mucha, Beth Bauer, Kris Tschetter, Angela Stanford and LPGA Championship winner Se Ri Pak are tied for ninth at minus six.
Jill McGill shared the overnight lead with Ammaccapane but struggled on Friday. She posted a 5-over-par 77 and made the cut on the number at 1-under-par 143.
Lorie Kane, Laura Diaz and Sophie Gustafson, all top-10 players in the World Rankings, missed the cut.
Full-field scores from Betsy King Classic