A day after hitting an ace at the par-3 16th in the opening round, Watson continued to sizzle with six birdies and no bogeys en route to a new 36-hole tournament scoring record.
'Thanks to no wind the record was broken,' said Watson, who is looking for his first win in the state of Florida. 'Wind makes golf challenging. Without it we can take advantage.'
The 2001 Senior PGA Championship winner picked up two strokes on the front nine to make the turn at 10-under. On the back nine he made the necessary birdies to hold off the challenges brought on by Irwin and Dana Quigley.
Quigley, who played in the same group as Watson, was either tied or within one shot of the lead for most of the afternoon.
On the par-5 13th Watson missed the green but a favorable lie allowed him to get up and down for a birdie. Quigley found the bunker with his approach and managed only par to fall two strokes back.
Quigley made back-to-back birdies from the 14th after hitting approach shots to within four feet on each hole but Watson matched him with a short birdie on No. 15 to remain alone in first.
On the 17th, Watson reached the green in two while Quigley opted to stay on the fairway. Quigley had found the water during the opening round and elected to take three shots to the green.
Watson had a long eagle attempt but aggressively ran the ball six feet past the hole. Quigley's third shot hit the green hard and rolled off the putting surface and onto the rough.
After Watson made birdie to climb to 14-under, Quigley managed to save par to again fall two shots off the lead.
To make matters worse, Quigley bogeyed the last to finish at 11-under.
'I look at this as a great challenge. Nobody expects me to beat Watson or Irwin,' he said. 'I'll try to have some fun with it. Maybe I'll wear sneakers.'
Irwin quietly made a charge up the leaderboard while Quigley was battling Watson. The 56-year-old, who was penalized one stroke Friday when his coin was moved by a ball that accidentally fell out of his hand, played a bogey-free round to finish with a 64 for the low round of the day.
'I tried to brush the penalty from yesterday aside and get on with what I needed to do,' said Irwin.
The two-time U.S. Senior Open champion made back-to-back birdies from the 17th to close out the round in second place at minus-12.
'I may need a similar round like I had today,' he said. 'I don't think Tom and I have played head to head in a while.'
Allen Doyle (67) and Jim Thorpe (68) were joint-fifth at 10-under 134 while Mike Hill (65) and Australia's Rodger Davis, who used five birdies on the front to match Irwin's 64, finished tied at 9-under 135.
Defending champion Gil Morgan was among a group of four players knotted at 8-under 136.
Full-field scores from the ACE Group Classic