The 36-year-old from Northern Ireland birdied six of the last seven holes, including the final four, to seize control on Friday, firing a seven-under par 65 to reach halfway on 12-under 132.
England's Justin Rose and Tommy Fleetwood, and Irishman Shane Lowry started the day five-under.
McIlroy tries to solidify his grip on the green jacket in Saturday's final pairing alongside Sam Burns, after watching a number of players close the gap to him.
American Cameron Young, the third-ranked Players Championship winner, reached six-under with a tap-in birdie after driving the green at the third and a hole out from 24 yards at the par-three fourth.
Also at six-under was China's Li Haotong, who sank a 10-foot birdie putt at the second and a three-footer at the third.
Top-ranked Scottie Scheffler went five-under on the front nine then birdied 11 to reach six-under. He made a six-foot eagle putt at the par-five second, clutch par saves at five and six, a seven-foot birdie putt at seven, an up and down for birdie from 42 feet at the par-five eighth and a four-foot birdie putt at nine.
After ending a 10-year major win drought with an emotional 2025 Masters victory to complete a career Grand Slam, McIlroy has made himself the man to beat for a rare repeat.
McIlroy, a five-time major winner, hopes to match Tiger Woods, Jack Nicklaus and Nick Faldo as the only back-to-back winners of the green jacket.
Second-ranked McIlroy's spectacular Friday birdie run included chipping in from 29 yards at the 17th hole and sinking a six-foot putt at 18 for Masters history.
McIlroy has yet to find a fairway on a par-five hole but has played them in seven-under, delivering a masterclass of wedge shots and precision putting on one of golf's greatest stages.
"I haven't panicked when I've hit it off course and into the trees," McIlroy said Friday.
"I sort of feel like I'm playing with the house's money, which is a nice place to be."
Only two 36-hole leads in major golf history were greater than McIlroy's, the record nine-stroke margin by Henry Cotton at the 1934 British Open and Brooks Koepka's seven-stroke edge at the 2019 PGA Championship.