Playing in the afternoon wave at Lake Merced Golf Club near San Francisco, Oh began her round at the 10th and carded three birdies on her outward nine.
The 21-year-old added another birdie at her 14th hole and parred in to complete a bogey-free 68 and a stunning form reversal.
In cool breezy conditions, Oh shares the lead with two-time winner at this venue Lydia Ko, Sweden’s Caroline Hedwall, Korean In Kyung Kim and American Jessica Korda.
"I hit the ball pretty solid today and the ones I missed I manged to get up and down and was pretty happy with my round," Oh told Golf Channel after her round.
"I haven't been playing that great from the start of the year but I didn't feel I was so far away but I have not been playing too many weekends and am glad that today was good."
"I put a brand new set of irons in this week and I guess that helped and I really like this course," she added when asked about the reversal.
"I needed different shafts and I went [for] way heavier shafts and back to steel shafts and it feels a lot more stable."
Oh - a former World No. 1 amateur - had shown little indication that a strong performance was on the way off the back of four consecutive missed cuts on the LPGA Tour in a season where she hasn't finished better than 48th.
Ko’s effort was also a significant improvement on her recent form although the New Zealander did indicate earlier in the week that she is pleased with her ball-striking but waiting for all the pieces of her game to come together.
After starting her round with a bogey at the 10th, Ko birdied the 11th, added another at the 2nd before highlighting her round with an eagle at the par-five 5th.
Minjee Lee also recovered from a bogey at her opening hole to finish with a round of 70 to be in a share of 10th place and just two behind the leading group.
Hannah Green had a 1 over round of 73, Rebecca Artis 75 and Sarah Jane Smith 78.
RULES: PENALTY AREAS
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