McIlroy, the overwhelming favorite from Northern Ireland, started on the back nine after a 50-minute rain delay Friday, made a couple of early birdies, then claimed the outright lead for the first time when he rolled in a 30-foot eagle putt at the 18th hole.
McIlroy picked up two more birdies in his final three holes for a 4-under 67, good enough for a one-shot lead over Jason Day and Jim Furyk. Day turned in the best round of the day with a 65, and Furyk had a 68.
Rickie Fowler and Ryan Palmer were two shots back, with Fowler surging into contention again at a major by shooting 66. He is already the first player since Woods in 2005 to finish in the top five of the first three majors of the year.
And don't forget Phil Mickelson, who rolled in an 8-footer for eagle at the final hole for a 67. Lefty was just three shots back.
Woods, meanwhile, struggled to his second straight 74 and failed to make the cut at a major for only the fourth time in his professional career.
"That was tough," Woods said. "I hit a lot of shots out there. Seventy-four of 'em. It was a long day."
Palmer was tied for the lead after the opening round with Lee Westwood and Kevin Chappell. Palmer turned in the best follow-up from that group, shooting 70 to stay firmly in the mix. Westwood faded a bit with a 73 and was four shots back. Chappell struggled to a 74 and dropped six strokes off the pace.
Woods was 109th place after Thursday, his only realistic goal to make the cut.
He wasn't even close.
Woods lipped out a 3-foot birdie attempt at the third, missing a chance to gain some momentum. He followed with a bogey at No. 4, after driving into a fairway bunker, and took a double bogey at the sixth when he drove far left of the fairway and three-putted from 18 feet. Still reeling from that debacle, he yanked his tee shot at the par-5 seventh into a muddy bog, could only pitch up to the fairway, pulled the next shot behind the green, failed to reach the short grass with his chip, and made another bogey.
The back nine was better a couple of birdies, one bogey but it didn't matter at that point.
Wood was all done at this PGA, still stuck on 14 major titles, the last one coming more than six years ago.
McIlroy, on the other hand, is at the top of his game. He arrived at Valhalla having won his last two tournaments. He captured the British Open at Royal Liverpool with a wire-to-wire performance, and rallied for a victory at Firestone last weekend.
Midway through the final major of the year, he is once again the guy everyone is chasing.
"I'm confident," McIlroy said. "I'm really in control of my game and my emotions. I need to do that over the weekend as well."
He dropped a shot with a bogey at the 12th, but birdied two of the next three holes. He seized the outright lead for the first time with the long putt at No. 18 and nearly made another eagle at the par-5 seventh. He stuck a shot from 243 yards to 8 feet, but the putt stayed right of the cup.
McIlroy grimaced and rolled back his head.
No problem. He closed with another birdie at the ninth, finishing off his round by curling in a 16-footer that left him at 9-under 133 overall.
McIlroy is going for his fourth major title at age 25, having already won the PGA Championship at Kiawah in 2012. He's got plenty of youth behind him Fowler is 25, Day 26.
The old-timers didn't fare too shabby, either.
Steve Stricker a 47-year-old, part-time player who was picked as an assistant U.S. Ryder Cup captain this week showed he's still got plenty of game. He made four birdies on his first nine holes on the way to a 68, which left him four shots back along with Westwood. Also at 5 under were Graham DeLaet (68), Victor Dubuisson (68), Joost Luiten (69), Henrik Stenson (71).
Kentucky native Kenny Perry will get to celebrate his 54th birthday on Sunday at Valhalla after shooting 69. A pair of 51-year-olds, Vijay Singh and Colin Montgomerie, also made the cut.
A steady rain forced officials to suspend the round after just 20 minutes because of too much water on the putting surfaces and fairways.
O Saturday, 9 a.m., TNT; noon, Ch. 2