The Scot, a European tour regular for more than a decade, opted to head to Australia late last year after losing her status.
The 35-year-old did well enough at the WPGA Tour of Australasia's qualifying school to earn a berth on the country's four-event Ladies European Tour swing and, after a birdie-eagle finish on Thursday, holds a one-shot lead at Sanctuary Cove.
MacDonald (seven-under 64) set a new course record to jump clubhouse leaders Green and Brit Charlotte Heath, who set the early pace with six-under rounds of 65.
A group of a four players will begin on Friday at five-under while eight more, including Australian Hannah Reeves are a shot further back.
Among them are players from Germany, Switzerland, Indonesia, Singapore, the Czech Republic, Spain, India and Sweden.
World No.7 Green was bogey-free on Thursday as she attempts to win a third-straight title.
"I've taken advantage of great weather, good golf courses, bit of travel," MacDonald said of her decision to come to Australia last year.
"And when I left Scotland, it was minus seven, so I can't complain. Just a great opportunity to keep playing.
"I can't win it on the first day, so just got to stick to the process and keep doing what I'm doing and hopefully hole some putts and we'll see how tomorrow goes."
Reeves was in Green's group in the final round of the Australian Open three years ago and will relish the task of chasing down one of the world's most in-form players.
"That was a day where you can't really put a price tag on that," the 24-year-old said.
"You learn so much just watching them and observing what they do.
"She's an incredible player, so definitely someone I look up to."
