The eight-time major winner belied his years as he shot a three-under-par 68 to join Scot Colin Montgomerie, German Bernhard Langer, Dane Steen Tinning, Japan's Kiyoshi Murota and American Bart Bryant on four-under 138 at Harbor Shores.
"It was a good day from a ball-striking standpoint," the 64-year-old Watson told reporters after a round blemished only by a double-bogey at the par-four 12th.
Five other players were bunched just one stroke off the pace on a congested leaderboard in the second major of the year on the over-50s Champions Tour.
Even though Watson has achieved almost everything worth mentioning in golf, he said he is still hungry for success.
"I don't like to lose and I like to get everything out of every shot," he smiled. "When I don't do well, I get angry with myself still.
"Like (Lee) Trevino said, when I stop getting angry with myself, then I know it's time to quit. And I haven't reached that point yet. I get frustrated at times, but I still have some fire."
In 2009, Watson came agonisingly close to winning the British Open at Turnberry at the age of 59, only to bogey the 72nd hole and then lose a playoff to fellow American Stewart Cink.
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