Making only his sixth Nationwide Tour start, the 26-year-old rookie held his first 36-hole lead at 10-under 134.
'It was just another good day,' said Killeen, whose first-round 65 tied the course record and gave him a one-shot lead overnight. 'You just try to keep some momentum going after the first day but you keep the same game plan.'
Aron Price shot a 69 and Joe Daley had a 70 to share a distant second place at 5-under 139. Guy Boros posted a 69 and was in fourth at four-under 140.
Killeen reached double-digits under par at the toughest layout on the Nationwide Tour schedule -- the 7,200-yard Course at Wente Vineyards.
Omar Uresti's winning score last year was just even par -- only the second time a player won on the developmental tour with a score of even par or worse.
On Friday, Killeen put three bogeys on his scorecard -- he has just four through two rounds -- but mixed them with six birdies. He has hit 29-of-36 greens in regulation so far.
'Every part of my game feels really good right now,' said Killeen. 'My irons have been really good and I've been able to hit most of my shots pin-high.'
Killeen was lucky to have a morning tee time on Friday -- saving him from the strong winds and 50-degree temperatures that forced the afternoon groups to finish their rounds in jackets.
His 69 was more than six strokes better than the 75.032 scoring average.
'I'm really relaxed this week. I'm just playing out there,' Killeen said. 'All I'm thinking about is hitting the right shot and so far it's paid off.'
Hunter Haas shot a 69 and James Love had a 74 to share fifth place at 3- under 141, with just nine players behind them also breaking par.
The cut line fell at 3-over 147 with 61 players moving on to the weekend.
The top four players on the Nationwide Tour money list all missed the cut: Jarrod Lyle, Ewan Porter, Darron Stiles and Scott Dunlap. They account for four wins in five tournaments so far this season.