Taylor had an eagle and four birdies, then parred the last five holes to move to 9-under 135 at Montreux Golf & Country Club, where his victories in 2004 and 2005 make him the 13-year-old tourney's only two-time winner.
"It's good to come back to a place you've played well," said Taylor, 35.
"I'm sure those other guys would say the same thing," he said. "A lot of good memories, a lot of good vibes, and you almost feel like you kind of pick up where you left off."
Steve Flesch, the 2007 champion, shot 69 and is tied for third with Hunter Haas and first-round leader Nick O'Hern at 7-under 137. Haas had 67, O'Hern 72.
Steve Elkington birdied four of his last five holes for 65 to get to 138 in a group that includes 2002 Reno champ Chris Riley, who shot 72 Friday.
And Notah Begay III, the winner of the inaugural tourney in 1999. Begay carded 67 to make his first cut since 2009 at the AT&T National.
Begay's group at 6-under also includes Roland Thatcher, who shot 67 Friday, along with Michael Thompson (68) and Robert Garrigus, Jay Williamson and Rod Pampling, who all shot 70.
Taylor holed out from a greenside bunker on the first hole, made a 20-foot birdie putt on the par-5 second hole and added a 25-foot birdie on the par-3 11th.
He hit a 302 yard drive on the 518-yard 13th, then hit a 5-iron stiff from about 210 yards to set up the short eagle putt.
He credited a switch to a "spinnier ball" for part of his success on the 7,472-yard mountain course where the ball typically travels about 10 percent farther than at sea level.
"You need it to stay in the air in the altitude," he said about one of the many calculations required to determine yardages often in swirling wind.
"The caddie does all the math, and we decide on clubs together. It's too difficult to do on your own."
CHAMPIONS TOUR: In Blaine, Minn., Jay Haas aced the fourth hole and finished with four straight birdies en route to an 8-under-par 64 to share the lead with John Huston after the first round of the 3M Championship.
Huston birdied five of his final nine holes. Gary Hallberg, Tom Lehman, Peter Senior and Rod Spittle were one shot back at the TPC Twin Cities.
Mark Calcavecchia, Dave Eger, Kenny Perry and Joey Sindelar were at 66.
With temperatures in the mid-80s, high dew points and little wind, 53 of the 80 players finished under par.
Augusta native Larry Mize was among them, shooting 71.
Because of the nearly 2 inches of rain received in the past week, the only complaint was that balls hit off the tee would stick in the damp fairway and leave mud on the ball, reducing the player's ability to control a second shot.
NATIONWIDE TOUR: In Omaha, Neb., Ken Duke shot 8-under-par 63 to grab a share of the second-round lead with Russell Knox at 13-under 129. Knox had 65.
Nationwide money leader Matthew Goggin (66) and former Clemson standout Tommy Biershenk (68) are among a group of seven players another stroke back.
Aiken native Matt Hendrix and North Augusta's Scott Brown failed to make the cut, which fell at 136.
Hendrix (71) finished at 138, while Brown (67) finished at 140.