Donaldson had five birdies on each side of the Lake Malaren Golf Club in beating the record 63 in 2011 by Noh Seung-yul.
"I played great from the word go, hit a lot of fairways and put myself in really strong positions and capitalized when I had putts," Donaldson said. "I didn't have many long putts, just played really well and one of those days where everything went for me. It's been a really good day.
"The course suits me. The fairways are quite generous and if you miss the bunkers you can play aggressive golf."
Donaldson needed just 24 putts in the round. He was 4-under on the par 5s and added a pair of birdies at the front-side par 3s.
Peter Hanson, who overcame two bogeys, and Francesco Molinari are tied for second at 6-under. World No. 1 Rory McIlroy, the event's defending champion, closed with a birdie to get to 5-under where he's tied with Michael Hoey and Jose Maria Olazabal.