Stiles and Morris completed 36 holes at 10-under-par 130.
Matt Weibring posted a 3-under 67 and is one shot back at minus-9.
Kris Cox (68), Justin Hicks (66), Won Joon Lee (65), Tee McCabe (64) and David Morland IV (65) share fourth place at 8-under-par 132.
Stiles, the 2006 champion, played the back nine first on Friday and ran off four birdies in the first five holes he played to jump to 7 under. After three pars, he chipped in for birdie at the 18th to make the turn in 8 under.
The four-time winner on the Nationwide Tour picked up birdies at the fourth and sixth at Hardscrabble Country Club to get to 10-under.
'I pretty much got everything out of today's round that I was supposed to,' Stiles admitted. 'If I hit it inside of 15 feet, I made it.'
Morris birdied the second, then drained three straight birdies from the fourth to get to 7 under. After he dropped a shot on the par-4 seventh, Morris bounced back with a birdie on the eighth.
Around the turn, Morris eagled the par-5 11th to jump to 9 under. He moved into a share of the lead thanks to a birdie at the 14th. He parred out to finish at minus-10.
Morris has no status on tour and has been trying to Monday qualify for events all year.
'I have no status on this tour,' Morris stated. 'Q-school has not been kind to me the last six years. My focus is on this tour. I know that with Monday qualifying, you're going to miss more than you make.'
He finished 57th last week, but found something that is helping him this week.
'Last week we got some things worked out with the driver and the putter's working,' said Morris. 'It was just a matter of time. It was getting closer and getting closer. Obviously, I'd like to have a five-shot lead, but I'm excited about where I'm at.'
Tommy Gainey carded 1-under 69 and dropped into a share of ninth at 7- under-par 133. He stands alongside Colt Knost and Chris Thompson. Five players are one shot back at minus-6.
The cut fell at 2-under-par 138 with 61 players moving on to the weekend.