With a sublime six-under-par 65, Lee delivered the best supporting act to Adam Scott in the shadows of Hollywood Hills during the second round of the $US20 million ($A28.25 million) Signature event.
Scott threatened to break the course record before settling for an eight-under 63 to rocket into outright fourth place at the halfway mark.
The two-time champion is nine under through 36 holes, three shots behind co-leaders Marco Penge and Jacob Bridgeman, who both carded Friday 64s at the ritzy Riviera Country Club.
At 11 under after a second-round 66, Rory McIlroy is the only other player above Scott on the leaderboard after Australia's former world No.1 produced a shot-making masterclass to surge into contention for a first title since winning the tournament for a second time in 2020.
Playing his milestone 1500th PGA Tour round, Scott was nine under through 13 holes and seemingly on course to shoot 61 - or better - for the first time, having signed for 62 on eight previous occasions.
Alas, the 45-year-old could only manage four straight pars, then a rueful bogey at the last to finish what was still the lowest round of the week thus far.
"I have a slight sour taste after coming off the last there, but it's probably my best round out here," Scott said.
"I actually couldn't really believe it through 13. I was nine (under). I don't even imagine that going out there.
"It's awesome. I'm lucky to be here this week on an invite obviously. It's my favourite stop on tour of the year, so I'm wanting to make the most of it.
"I've been feeling like I've had a lot of good golf since last summer and got absolutely no results thanks to like average putting, I would say.
"The standard's incredibly high out here week in and week out and average putting just isn't going to get it done, so it's nice to see myself up on the first page of a leaderboard, and hopefully I can play a couple more good rounds and be in the hunt here.
"It would be pretty awesome to get a victory here again."
Joint runner-up last week at Pebble Beach, Lee believes his game is starting to click six weeks out from the Masters, the year's first major championship at Augusta National.
"Back-to-back weeks playing the most iconic places in America and I just had a good vibes coming in trending," the 27-year-old said.
"My game's trending, and (I'm) playing really good golf, so that helps, and yeah, I just did everything pretty solid and hopefully I can keep going."
Asked specifically what parts of his game were trending, Lee said: "everything really".
"Normally chipping is the best part of my game, but it seems like the last two weeks the chipping hasn't been up to date and everything else has been a lot better, so I think I'd rather that combo.
"Everything's just ... a couple of equipment changes and I just feel a lot more confident in my game and, yeah, I feel like it's trending.
"I just haven't put four like good rounds together. Last weekend I did and it was nice to get a good result and hopefully I can do it again this week."
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