Min Woo Lee sunk an eagle at the 18th to surge into the sole lead at the Australian Open on Friday as he targets back-to-back DP World Tour titles, while major winner Shin Jiyai took charge of the women's event.

Australia's hottest new golf star recovered from a bogey at the first to make six birdies before finishing with a bang on his way to a seven-under-par 64 to be 12-under at the halfway stage in Sydney.

"It's always nice to make an eagle, but on the last hole, it's even nicer," said Lee, who convincingly won the Australian PGA Championship last week, following victory at the Macau Open on the Asian Tour.

"Sometimes you play good and sometimes you play bad, and right now I'm playing good and I'm having fun."

Fellow Australian Cameron Smith was also celebrating after finding his touch again with a 68 to make the cut by two shots, having missed it by nine last weekend in Brisbane, after which he was close to tears.

But the 2022 British Open champion has a mountain to climb to reel in the red-hot Lee.

"It was a lot better today and could have been way less," said Smith after partnering Lee in front of big crowds. "I did everything I needed to do except hole the putts, which is really frustrating."

Scotland's Connor Syme thrust himself into contention for a maiden DP World Tour win with a two-under 70 to be joint second on nine-under along with the American Patrick Rodgers, who also hit 70.

Smith's LIV Golf colleague Joaquin Niemann from Chile, Venezuela's Jhonattan Vegas, and Australian Sam Brazel are eight-under.

The mixed Australian Open involves men and women teeing off in alternating groups on the same courses.

The Jack Nicklaus-designed Australian Golf Club is the main venue across all four days, with the nearby Lakes Golf Club co-hosting play for the first two rounds.

In perfect summer weather, South Korea's two-time major winner Shin assumed control of the women's tournament with three birdies in the final five holes leaving her nine-under for the tournament.

South African defending champion Ashleigh Buhai is her nearest challenger on seven-under, with South Korea's Jenny Shin six-under.

"Very nice finish, especially the back nine," said Buhai. "Anytime you're in there near the top going into the weekend, you're playing some good golf and doing what I'd like to be doing."

Australian 16-year-old Rachel Lee, the shock joint overnight leader with Jenny Shin, struggled in the spotlight with three bogeys and two double bogeys on the back nine contributing to a 79.

It left her tied for 19th.

Australia's world number five Minjee Lee – sister of men's leader Min Woo Lee – had a day to forget with a 75 leaving her in a tie of 11th at even par.