Molinari tied Felipe Aguilar, of Chile, and Simon Thornton, of Ireland, at 9-under 135 at the Golf Club Torino.
Former Augusta State golfer Scott Jamieson shot 69 and is at 141.
A Turin native, Molinari has been the center of attention at the tournament. He won the event in 2006.
“This is a special, special week for me,” Molinari said.
“I was emotional yesterday on the 10th tee at 8 a.m. with only 50 people watching, so now with all these people on my course, it’s a great feeling.”
Molinari’s Ryder Cup teammate Nicolas Colsaerts lost his overnight lead when he bogeyed the 16th and 18th for 71.
He’s one stroke back, along with David Higgins and Steve Webster, who both had 69s on Friday.
CHAMPIONS TOUR: In Kapolei, Hawaii, Mark Wiebe bogeyed his final hole but still shot 8-under-par 64 to take a two-shot lead after the first round of the Pacific Hawai’i Championship.
It was the only bogey on the card for Wiebe, who had nine birdies.
Mark Calcavecchia and John Cook had 66s and Brian Henninger shot 67.
Augusta native Larry Mize opened with 71.
CLUB PROS: In Hexham, England, club pro champion Mike Small and Bob Sowards won their matches and the Americans swept the fourballs session to build a 6-2 lead over Great Britain & Ireland in matches between golf professionals.
Small and Sowards won their foursomes match, 5 and 4, over Greig Hutcheon and Scott Henderson.
In the afternoon at Slaley Hall, they secured a 2-up win over Hutcheon and Graham Fox.
Both teams won two foursomes matches in the morning, but the Americans took a big step toward retaining the cup with a sweep in the afternoon.