Donald shot his 62 on the SpyGlass Hill Golf Course, one of three courses in the rotation this week. That matched defending champion Phil Mickelson's course record from last year. Mickelson went wire-to-wire for the victory in 2005.
Pebble Beach Golf Links and Poppy Hills Golf Course are the other courses in the rotation as play is spread over the first three rounds. After the 54-hole cut, the golfers, who team with an amateur partner, play Pebble Beach on Sunday.
Mike Weir, who has three top-4 finishes in his last three starts at this tournament, posted a 9-under-par 63 at Pebble Beach. He is alone in second place.
Michael Allen (SpyGlass), Arron Oberholser (Poppy Hills) and Nick Watney (Pebble Beach) all carded 7-under-par 65s on Thursday, and are knotted in third place.
Donald began on the back nine Thursday and parred his first before an amazing stretch of golf. At the par-5 11th, Donald reached the green with a 2-iron second shot. He two-putted for birdie from 30 feet, then at the 12th, Donald sank a 45-footer for birdie.
The 16th-ranked player in the world rolled in a 15-foot birdie putt at 13, but saved his most heroic shot for the par-5 14th. Donald holed a sand-wedge from 96 yards for eagle to reach 5 under par through his first five holes. Donald added another birdie at the par-3 15th when his pitching-wedge stopped 12 feet from the hole and he converted the putt.
'It was obviously a great start,' acknowledged Donald, who played on the European Ryder Cup team in 2004. 'I kept going and didn't threaten bogey all day.'
Donald parred his last three holes on his opening nine, but birdied the first from 4 feet. He hit a 4-iron to 30 feet at the difficult par-3 fifth, and drained the birdie putt to get to 8 under par.
Donald matched Mickelson's record at the par-4 ninth. He knocked a 6-iron 12 feet over the flagstick and buried the putt to post his lowest round on the PGA Tour.
'It's nice to finish off strong, especially when you had a good round going,' said Donald. 'I knew that was a 62, so I was excited. I did feel very calm. I didn't feel nervous at all.'
Weir got off to a poor start at Pebble Beach when he missed the green left at one and made bogey. He parred the second, then went on a tear. The Canadian nearly holed his second shot at the par-4 third, but tapped in for birdie. He made it back-to-back birdies with a 4-footer at the fourth and kept it going with a long birdie putt at five.
The 2003 Masters champion birdied the par-5 sixth and capped off his birdie run with a 15-footer at No. 7. That was five birdies in a row for Weir and he squandered two makeable birdie putts at eight and nine.
After he made the turn, Weir got back on track. He drained a 12-foot birdie putt at the 10th, then hit his tee ball to 10 feet at the par-3 12th to set up another birdie.
He birdied 14, 16 and 18 to get within one of Donald.
'It was funny how it turns out like that,' joked Weir, who battled a neck injury for most of last season. 'I wasn't feeling real great with my swing. I just happened to hit a close shot and built my confidence.'
Brian Davis, Darron Stiles and Tim Clark all shot 66s on Thursday at Pebble Beach. They are tied for sixth place with Greg Chalmers, who fashioned his round of 66 at SpyGlass.
Mickelson leads a group tied for 10th place at 5-under-par 67.
Vijay Singh and Jim Furyk are part of a logjam in 22nd place at minus-4.