With his long putter cranking, the world No.17 ensured caddy Steve Williams grabbed bragging rights over his former boss Woods.
Day, playing with Phil Mickelson for the first time in front of a huge gallery, threw down the gauntlet right from the word go by putting his approach shot on the 10th hole, his first, to just a metre.
He made the putt and added further opening-nine birdies on the 13th, 16th and 18th holes to make the turn at four under 31.
Further birdies on the second, fifth and ninth holes ensured he would sleep on the overnight lead and be well placed to grab just his second career win.
Having moved up to eighth in the world following seven top 10s on the PGA Tour this season, including runner-up finishes at The Masters and US Open, Day claimed it was 'boring' golf that ensured he scored well.
"I hit driver well and hit a lot of good quality iron shots into the greens,'' he said.
"I didn't stomp it all day, but I hit it to a good 15 to 20 feet all day. My putter was good all day. I hit a lot of good quality putts and felt it was a boring kind of a game.
"It was down the middle, on the green, and every two or three holes was a birdie which was nice.
"But I'll take a boring seven-under all the time.''
Geoff Ogilvy and Aaron Baddeley posted solid two-under-par 68s but, in Ogilvy's case, it could have been much better.
He opened with a bogey before rolling in three straight birdies and gained further strokes on the sixth, 10th and 12th holes to be tied for the lead in the early going.
But bogey at 13 and then back-back dropped shots to close his round at 17 and 18 left a sour taste.
Richard Green managed six birdies but counteracted them with five bogeys to post a one-under 69 while Robert Allenby carded an even-par 70.
Stuart Appleby's struggles continued with a three-over 73 leaving him tied 64th in a 76-man field.
Meanwhile, in a case of lucky sevens, Nick O'Hern leads midway through the PGA Tour's Reno-Tahoe Open's opening round by one shot after a seven-under 65.
Matthew Goggin is one shot back in second at the Nationwide Tour Cox Classic after a seven-under 64.
- AAP