Pettersen, who won the tournament in 2007, finished the day one stroke ahead of Karin Sjodin and three strokes better than Ai Miyazato, Hyun-Hee Moon, Ha Neul Kim, So Yeon Ryu and Azahara Munoz.
Defending champion and world No. 1 Yani Tseng shot a 67 to finish the day in eighth place.
Pettersen -- playing the back nine first at Ocean Course at Sky 72 Golf Club -- birdied her first two holes, parred No. 12, birdied the next three straight and then birdied No. 17.
She played the front nine in 3-under to top the existing course record, 65, set last year by Tseng, Soo-Jin Yang and Yeon-Ju Jung.
2014: The Year in Music [PHOTOS]