Gavin Green posted a 64 from the very first group of the day to set the target at 11 under and while nobody could catch him, McIlroy whipped the huge crowds in Crans Montana into a frenzy as he picked up five shots in his last five holes in a 63.
Tommy Fleetwood was also in the group at ten under alongside McIlroy, Australian Wade Ormsby, Austrian Matthias Schwab and Argentina’s Andres Romero – who posted the lowest round of the week so far with a 61.
Italian Lorenzo Gagli and Japan’s Hideto Tanihara were at eight under, a shot clear of 55-year-old 2010 champion Miguel Ángel Jiménez, his fellow Spaniard Adri Arnaus and another Italian in Renato Paratore.
McIlroy came within a whisker of claiming his maiden European Tour victory at this event in 2008, bogeying the last and then losing out in a play-off to Jeff Lucquin, and has said if he could have one do-over in his career it would be the bogey on the 72nd hole that week.
In his three appearances in the Swiss mountains the World Number Two has never finished lower than seventh and looked right at home from the moment he teed off eight shots behind Green in round two.
A 12 footer at the second brought a first birdie of the day and while he gave the shot straight back, he got up and down for birdies at the driveable par four sixth and seventh and made another gain from 15 feet on the eighth.
He sandwiched a birdie from 12 feet at the 11th with bogeys on the ninth and 12th but really came to life on the back to back par five 14th and 15th.
The Northern Irishman launched a huge drive down the 14th to set up a two putt birdie and then bombed another and put his second at the next to 16 feet for an eagle.
A tee shot to four feet on the par three next followed and when he put an approach at the 17th to six feet, he was into double figures.
While McIlroy has 13 European Tour wins including four Major Championships, Green is still seeking his first but arrived in Switzerland with three top tens from his last seven starts.
After an opening 65, he started with a bogey on the tenth but then reeled off four birdies in a row from the 11th and another on the 18th to turn in 31.
Further birdies on the first and fourth put him in a commanding position and while he bogeyed the sixth, he drove the seventh to set up another gain.
Fleetwood took advantage of the back to back par fives on the back nine, getting down in two putts after finding the 14th green in two and hitting a stunning second to ten feet at the next for an eagle.
The 2017 Race to Dubai Champion then got up and down from the sand at the seventh in a bogey free 66, while Schwab was also bogey free in a 67 as he made gains on the 14th, 15th and ninth.
Romero recovered from a bogey on the second with eight birdies and an eagle in his lowest ever European Tour round, while Ormsby posted seven birdies and a bogey in a 64.
Tanihara registered a 66 while Gagli signed for a 68, with Major Champion and 2005 winner Sergio Garcia in the group at six under after a 68.