Five players share second place. Ed Dougherty, Bruce Fleisher, Hubert Green, Mike Smith and Tom Wargo each carded rounds of 6-under-par 66 to trail the leader by one.
Hatalsky, who was the runner-up last year after being a Monday qualifier, had success on both the front and back nine at Egypt Valley Golf Club. He opened with four straight pars before getting going.
The two-time winner on the Champions Tour chipped in for birdie at the par-4 fifth. He quickly moved to minus-3 with an eight-foot eagle putt at the par-5 seventh and he followed with another chip-in birdie at the next to make the turn at the 4-under.
'I would say that's unusual for just about anyone on the planet to chip in twice in one day,' said Hatalsky, who won the Southern Open last month. 'That chip on five got me started.'
Hatalsky had a similar start to his back nine. He opened with four straight pars before a birdie at the par-4 14th. The 51-year-old closed with back-to-back birdies from the 16th to take over first place by himself.
'I had some good fortune out there today,' said Hatalsky, who matched the best first-round tournament score, set by Bob Gilder in 2001. 'Today was a day for scoring, because for the most part the weather was perfect. I made my share of putts, but I like the golf course. It has some leniency off the tee, but off some of the tees you have to position yourself well.'
Dougherty had an up-and-down front nine, where he notched two birdies, a bogey and an eagle. Around the turn, he carded four birdies and a bogey for a share of second.
Fleisher, in contrast, was steady throughout. He had two birdies on the front nine but on the back side, he birdied four straight holes to get to minus-6. He then bogeyed the 15th before birdieing No. 17.
'I haven't played that well, but I've gutted it out,' said Fleisher. 'Today, I surely didn't drive the ball very well.'
Green opened with a bogey at the first. He then posted back-to-back birdies from the fourth before a bogey at the sixth. Starting at the par-5 seventh, Green birdied every other hole on his way to a 66.
Wargo birdied four of the last five holes on the front nine to make the turn at minus-4. The 1993 Senior PGA Championship winner birdied the 12th and 18th for his share of second.
Smith posted back-to-back birdies from the second and again from the eighth. He made it three straight with a birdie at the 10th. Smith bogeyed the 14th, but came right back with a birdie at the next. He closed with a birdie at the last.
John Jacobs, who won the Senior PGA Championship two weeks ago at Aronimink, continued his fine play. He fired a 5-under-par 67 and shares seventh place with Eamonn Darcy.
Defending champion Jay Sigel stands a 2-under-par 70.