Pat Perez torched Bermuda Dunes with 10 birdies over his first 11 holes en route to a 61 of his own. Perez was joined by Stephen Ames and Joe Durant at 14-under-par 130.
Haas, a veteran of the PGA Tour who captured this event in 1988, shot his career best at the age of 49.
'It was a magical day for me,' said Haas. 'I played extremely well. I felt good coming in. I played well last week and felt good yesterday finishing up, and felt like it was going to carry over today.'
He started with birdies on each of the first four holes and added another at the par-4 eighth to make the turn at 10-under.
Haas two-putted for birdie at the par-5 11th and drained a 35-footer at the par-3 12th to make it two in a row. Haas then hit a sand-wedge inside six feet for a birdie at the 14th.
At the par-4 16th, Haas hit a wedge to eight feet for the first of three consecutive birdies to close out his round.
'I guess when a golfer plays well, we think we can do that every day,' said Haas. 'We hit a bad shot or something and we can't believe it. I'm not shocked, but I'm certainly very ecstatic and just extremely pleased that I was able to do it.'
After 26 years on tour and nine career victories, Haas showed no signs of moving on to other things.
'I feel like this is the Major Leagues right here and this is what I want to do for as long as I can do it,' he said. 'I mean, this is one of the thrills of my career today, just to shoot a great round like this in a field like this.'
Frazar, who held the lead after three rounds of the Phoenix Open last week, played Indian Wells and picked up his first birdie at the par-4 second. He faltered with a bogey at the fourth but recovered with three straight birdies from the fifth and knocked a 5-wood to 12 feet for eagle at the par-5 eighth.
The 31-year-old hit his approach to six feet for birdie at the 10th for the first of three consecutive birdies on the back nine. He birdied the 14th but found trouble with a bogey at the very next hole.
At the par-5 18th, Frazar reached the green in two and drained the putt for his second eagle of the day and a round of 62.
'The golf courses are relatively easy, but playing out here is like playing in a dome because they are so good, the greens are perfect,' said Frazar. 'Unless the Santa Anas start blowing, guys are going to keep on going low.'
Davis Love III had nine birdies and one bogey for a round of 64. Love finished alongside Mike Weir and Rod Pampling at 13-under-par 131.
J.L. Lewis, John Huston, Chris DiMarco, Cliff Kresge, Mark Calcavecchia and Scott McCarron were one shot further back at 12-under-par 132.
Bob Tway, who shared the opening-round lead with Ames, carded a 2-under 70 to finish five shots off the lead. Tway was joined by Glen Hnatiuk, Justin Leonard, Jeff Brehaut, Doug Barron, Tim Herron and Shaun Micheel.
Defending champion Phil Mickelson posted a 4-under 68 to finish in a group at 6-under-par 138.