McIlroy joined DP World Tour chief executive Keith Pelley, fellow players and caddies on the putting green in front of the first tee for a moving two-minute silence before play began.
Billy Horschel (35), the tournament's reigning champion, visited nearby Windsor Castle to pay his respects and Australian player Min Woo Lee did the same at Buckingham Palace after the tournament was put on hold on Friday following Queen's death on Thursday.
With play resuming in a shortened 54-hole event on Saturday, McIlroy saluted the Queen, who was the nation's long-serving monarch when she passed away aged 96.
"I think growing up in Northern Ireland the Royal Family was part of our culture and you just sort of took it for granted that the Queen is the Queen," said McIlroy, who met the monarch when he was given his MBE in 2012.
"You don't realise that there's going to be kings and queens after that. She was such a steadying figure for the entire country.
"I was very fortunate. I got to meet her a few years ago and she could not have been nicer. I have the picture of that in my house alongside my MBE, which I am very proud of as well.
"I thought it was the right decision for us to continue. I don't think we are disrespecting anyone by playing and celebrating what a life the Queen had."
McIlroy began his second round eight shots off the lead but gradually made up ground with an eagle on the fourth and a birdie on the eighth taking him out in 32.
Another birdie on the 18th saw McIlroy match his lowest ever score at Wentworth, a 65 leaving him one off the pace alongside Thomas Detry and Rafa Cabrera Bello and behind Viktor Hovland and Soren Kjeldsen.
Kjeldsen had set the early target thanks to a superb 64, the 47-year-old Dane dropping a shot on the first but responding with an eagle and seven birdies.
Speaking about observing the period of silence before play Kjeldsen said: "Being a foreigner but having lived here I had some idea how much the Queen meant to the British public.
"But it was quite overwhelming and I was taken aback by how much she was loved. It was a very special moment."
