Lorena Ochoa posted a 5-under 67 to finish two shots off the pace. The 21- year-old from Mexico was joined by Rebecca Coakley, Becky Morgan and Alison Nicholas in a tie for third.
'It's lovely, very enjoyable,' said Davies. 'I used a lot of irons off the tee today as I don't need a lot of length around here and I only used driver where I had to and it worked. Seven-under at an Open is never a bad thing.'
Davies played the back nine first at Terrey Hills Golf & Country Club and birdied the 10th and the 11th to jump out of the gate. She added a birdie at the par-5 14th to reach 3-under but found trouble with a bogey at the par-4 17th.
The Englishwoman responded with a birdie at the first and added a birdie at the par-4 second to reach minus-4. Davies caught fire down the stretch again with a birdie at the eighth and then knocked her second shot to 10 feet at the par-5 ninth.
Davies drained the putt for an eagle and sole possession of the lead after the first round.
'I've definitely got my confidence back with the driver,' said the 39-year- old. 'It feels good to have a solid swing again.'
Van Ryckeghem tallied six birdies and no bogeys for a flawless 66.
'I'm very surprised,' said the Belgian. 'I've been playing so badly and hitting the ball so badly recently so I went out there today with nothing to lose. Today was strange, I hit the ball well and everything went right and I think I have to take the confidence from it.'
Sophie Gustafson, Mardi Lunn, Kelly Robbins, Rachel Teske and Iben Tinning finished tied for seventh at 4-under-par 68.
Australia's Karrie Webb, who won this event in a playoff last year, finished in a group at 3-under-par 69.