Steele shot a 7-under 65 at the Glen Abbey Golf Club on a day that saw 68 players break par. He has missed the cut in seven of his last 10 tournaments and stands 95th on the FedEx Cup points list. Only the top 125 on that list earn a spot in the PGA Tour playoffs, which are less than a month away.
Hunter Mahan, who played in the final group last Sunday at the British Open and eventually finished in a tie for ninth, was tied for fifth with David Lingmerth at 67.
Steele played the back nine first on Thursday and after making the turn ran off five birdies in a seven-hole stretch. He had not shot a 65 since posting that score two days in a row at the Phoenix Open, where he finished tied for sixth in what has been his best showing of the year.
His only tour victory came two years ago at the Texas Open.