Tom Jenkins fired a 65 to take second place alone at 7-under-par 137. Defending champion D.A. Weibring managed an even-par round of 72 to join Stewart Ginn and John Harris in a tie for third place at 5-under-par 139.
Stadler has four victories on the elder circuit this season, two of which have come in his last two starts, including the Tradition last month. The 2003 Rookie of the Year can move closer to earning Player of the Year honors with another title this week.
'I'm playing well now,' he said. 'I've played pretty consistent this year. It's fun to play out here every week with these guys.'
Stadler held a two-shot lead to start the day at Prestonwood Country Club but struggled early with a bogey at the par-4 fourth. He recovered with a birdie at the par-5 seventh and hit his second shot to 4 feet for a birdie at the ninth to open a three-shot advantage around the turn.
'I didn't get off to a good start again,' said Stadler. 'I've been 1 over after six holes the last couple of days but have turned it around.'
The 51-year-old kept plugging along in the inward half and played his tee shot to the back fringe at the par-3 11th. Stadler then ran home the 15-foot birdie putt to move to 9 under.
Stadler was unflappable down the stretch and dropped his approach inside 10 feet for a birdie at the par-4 15th. He then reached the par-5 17th in two and left his eagle try within a few inches of the cup. Stadler tapped in for birdie to stretch his lead to four with one round to play.
Jenkins was seven shots off the pace after the opening round and collected a pair of birdies over his first nine holes to make the turn at 2 under.
The 56-year-old continued to climb up the leaderboard with a birdie at the par-3 11th and back-to-back birdies from the par-4 14th. Jenkins then landed his second shot to the par-5 17th inside 9 feet of the hole and drained the eagle putt to finish within four of the lead.
'Certainly a wonderful round,' said Jenkins, a five-time winner on the Champions Tour. 'Felt good today and just wanted to shoot a good round and get back in the red.'
Wayne Levi had a chance to move within five of Stadler with a clear look at the green on the 18th. The 52-year-old left his second shot in a bunker en route to a bogey, however, and a round of 73.
Levi was joined by Larry Nelson and Lonnie Nielsen in a tie for sixth at 4-under-par 140.
Tom Kite, Doug Tewell, Des Smyth, Allen Doyle, Walter Hall and Mike Reid share ninth place at 3-under-par 141.