In temperatures topping 27C, the 28-year-old from Sydney fired a 68 containing five birdies and one bogey to end the day on nine-under-par, three clear of Amy Boulden and Celine Herbin.
"It was nice and solid, nothing too crazy and I birdied the two par fives, 10 and 14," said Kemp, with two runner-up finishes in six seasons on the Ladies European Tour.
"This is great. I haven't been in this position too many times and this is where I want to be, somewhere in contention. I thought the wind was going to be up a bit more but it's not really and not as strong as yesterday. There is definitely a bit of wind, but I'm happy with the score."
Ladies European Tour (LET) rookie Amy Boulden fired a second successive round of 69 to be six-under. The 20-year-old from Llandudno in North Wales had five birdies and two bogeys, finishing her round in gusty conditions and said: "I'm playing very steady at the moment. I got off to a rough start and was lucky to be one under through seven or eight holes but I managed a good back nine to get it back."
Boulden, who was the first reserve for the tournament, qualified for the US Women's Open at the venue six weeks ago and now has the chance to qualify for next week's major, the Ricoh Women's British Open, if she is one of the top three LET members not otherwise exempt.
"I was first reserve and I got in yesterday at 10am after someone pulled out with a bad eye so it's great to play. I'm liking the course; it's in great condition. I'm in a good position but I three putted the last which was a bit disappointing. I've got final qualifying on Monday so hopefully I'll get a good week here," said Boulden.
Playing in gustier conditions in the afternoon, with wind speeds at 20 miles per hour, Frenchwoman Herbin completed a solid 71 with an eagle on her last hole, the par-five ninth, to join Boulden on six-under.
Herbin said: "It was a very nice way to finish. I hit a huge drive, six-iron second shot and I put it to four metres, so it was a very good putt. It was a difficult round, you had to stay patient in those conditions because it was very windy today and much windier than yesterday morning. The golf course is getting more and more difficult so I'm very happy.
"I think it was only about patience. I was not looking for the flags, I was looking for the middle of the green and conditions were difficult. I went shot by shot and I hit 16 greens so my iron game is very good and I'm just looking for the middle of the green."
The five players a stroke further behind were Amelia Lewis, Gwladys Nocera, Lee-Anne Pace, IK Kim and the world's number one amateur Minjee Lee, who all played in the morning.
The defending champion Karrie Webb had a 70 which left her on one-under-par and eight shots off the lead, while English Solheim Cup star Charley Hull slipped down the leader board to level par after a 74 which included two double bogeys on the third and 18th holes. She also dropped a shot at the signature 17th.
Hull said: "I played really well today and hit the ball really well and I didn't do much wrong on the last. I hit a good iron shot which bounced on the green into the bunker. It was a tough bunker shot and I couldn't hole it. I hit a good drive on 17 as well. I'm hitting it well, it's just the wind got up."
Defending champion Karrie Webb is eight shots from the lead although other Australians have done better over the opening 36 holes including Minjee lee who is in a share of 4th place and four from the lead, Nikki Campbell is one shot further back, Stephanie Na another shot further back in 12th position and Sarah Jane Smith is 17th position and seven shots behind Kemp.
There were six amateurs amongst the 79 players who made the cut at +6: Minjee Lee, Su-Hyun Oh, Georgia Hall, local amateur Annabel Dimmock, Mathilda Cappeliez and Jing Yan. Dimmock, 17, from Wentworth, hopes to turn professional "˜sooner rather than later' and signed up for membership of the Ladies European Tour Access Series, the LET's developmental tour.
The third round begins at 8.55am on Saturday, with the leading trio of Kemp, Boulden and Herbin out at 13:56.
Leading scores at the end of round 2:
135 - Sarah Kemp (AUS) 67 68
138 - Amy Boulden (WAL) 69 69, Celine Herbin (FRA) 67 71
139 - Lee-Anne Pace (RSA) 70 69, I.K. Kim (KOR) 71 68, Minjee Lee (AUS) 71 68, Amelia Lewis (USA) 68 71, Gwladys Nocera (FRA) 69 70
140 - Sally Watson (SCO) 67 73, Nikki Campbell (AUS) 72 68, Becky Morgan (WAL) 68 72
141 - Diana Luna (ITA) 69 72, Stephanie Na (AUS) 71 70, Katie Burnett (USA) 70 71, Vikki Laing (SCO) 69 72, Stacy Lee Bregman (RSA) 70 71
142 - Caroline Masson (GER) 68 74, Hannah Jun (USA) 71 71, Sarah-Jane Smith (AUS) 72 70, Rebecca Hudson (ENG) 70 72
143 - Karrie Webb (AUS) 73 70