Patricia Meunier-Lebouc of France was flawless on Thursday with an 8-under-par 64 and is alone in second place. Betsy King, Laura Diaz, Jen Hanna and Becky Iverson share third with 6-under 66s.
Morgan, who finished second to Hee-Won Han in last year's Rookie of the Year race, opened on the back nine at the Rail Golf Course and took advantage of the first par-5 she faced, the 12th. She laid up instead of going at the green in two and knocked a wedge to four feet to set up birdie.
She added a pair of 25-footers at 14 and 18 for a front-nine 33, but the best was yet to come for the Wales native.
Morgan played a 7-iron to six feet to set up birdie at both the first and second holes before draining a three-foot birdie putt at the par-5 fourth.
The 27-year-old rushed to the top of the leaderboard on her closing holes. At the sixth, Morgan played a 5-iron four feet from the hole to set up birdie. She ran home a pair of 12-footers at the seventh and eighth holes to reach 9-under-par and fire her lowest round on tour.
'I just hit the ball really well and I hit a lot of greens,' said Morgan, whose best finish this season is a tie for seventh at the ShopRite LPGA Classic. 'I just gave myself a lot of chances.'
Morgan is looking for her first victory on tour but knows there are still 54 holes to play before a trip to the winner's circle.
'Sometimes, you can struggle Thursday to get off to a good start, so I think today's round was good for me,' said Morgan. 'I hit the ball really well today, so there's no area of my game that's lacking. I'm just going to try to keep going forwards.'
Meunier-Lebouc birdied four holes in a row on the front side and collected three more before the 18th. At the final hole, she hit an 8-iron to 15 feet for a closing birdie to get within one of Morgan's lead.
'I putted very well and I've been much more consistent than I've been in the year with my long game,' said Lebouc, who played on the European Solheim Cup team in 2000. 'Today I was consistent through 18 holes and my putting was good too.'
One of the focuses of this tournament revolves around the Solheim Cup. This is the last week for Americans to earn points toward one of the 10 automatic berths to the team.
Cristie Kerr and Wendy Ward, both inside the top-10 in the U.S. Solheim standings, finished Thursday's round tied for seventh with 5-under-par 67s. Also in the group at 5-under is Nancy Scranton, who is currently 14th on the points list.
Full-field scores from the State Farm Classic