Sonny Skinner, Patrick Sheehan and Curt Byrum shared second place at 7-under par. Stan Utley, D.J. Brigman, Todd Barranger and Hunter Haas were tied for fifth at minus 6.
Sterling started on the back nine at Fox Den Country Club and quickly made his move up the leaderboard. He drained a 10-foot birdie at the par-5 10th before cashing in on an 18-foot birdie putt at the par-3 13th.
Sterling took advantage of the other par-3 on the back side at Fox Den, roping a 4-iron to four feet to set up birdie at the 212-yard 16th. He made it back-to-back birdies by rolling in a five-footer at 17 to make the turn at 4-under 32.
He made only one birdie on the front side, a 35-footer at the par-5 fifth, but it was enough for the 36-hole lead.
'I had a couple of good saves and some stressful pars out there today,' said Sterling, who needed only 24 putts on Friday. 'There are a lot of birdies out here. The greens are soft and rolling good and that leads to good scores.'
Skinner mixed six birdies with three bogeys for his round of 3-under 69. With his opening-round 68, Skinner posted two consecutive rounds in the 60s for the first time since shooting 67-69 on the weekend at the 2001 Utah Classic.
Sheehan flew out of the gate with five birdies on his front nine but cooled off on the back with a 1-over 37. He shot a second-round 68 and will play in the second-to-last group Saturday with Byrum.
Byrum is playing in his fourth tournament of the season as he has spent much of his time as an analyst for The Golf Channel. He drained a 30-foot eagle putt at 10 but bogeyed his next hole and finished with a 2-under 70.
The 36-hole cut fell at 2-under-par 142 and 62 players qualified for the weekend.
Full-field scores from the Knoxville Open