The 41-year-old Irishman, who replaced Open champion Ernie Els in the elite event which brings together the winners of the year's four Majors, fired a sparkling five-under-par 66 at Port Royal Golf Course in Southampton.
In a relaxed and chatty mood with his playing partners, Harrington sandwiched birdies at the 14th, 15th and 17th around a bogey at the 16th to finish two strokes clear of American left-hander Bubba Watson, the Masters champion.
Webb Simpson, winner of this year's US Open, was a further shot back after carding a 69 in the 36-hole event while fellow American Keegan Bradley, the defending champion, shot a 72.
"Every day I play, I always try to make an effort to enjoy the day, talk to my playing partners," Harrington said after mixing seven birdies with two bogeys in ideal scoring conditions.
"Today it was better than ever. We were all very relaxed out there. Everybody was up for a chat. Selfishly, I play better when the whole group enjoys it. If the guys have any sense, they shouldn't talk to me tomorrow," he added with a grin.
Harrington, who accepted an invitation to compete at Port Royal after South African Els withdrew on Saturday because of an ankle injury, is bidding to win the prestigious event for the first time after twice losing out in play-offs.
The Irishman was edged out by Argentina's Angel Cabrera in 2007 and was pipped to the title by American Jim Furyk in 2008.
On Tuesday, however, Harrington was stunned by the accuracy off the tee by Watson who is one of the game's longest hitters.
"It's unbelievable how straight he hits the ball," said the Irishman who won The Open in 2007 and 2008 and the US PGA Championship, also in 2008. "Bubba is long, there's no doubt about it, but he's incredibly straight.
"It's unusual to see the long hitter always reaching for the driver, and it's obviously the best club in his bag."
Watson eagled the par-five seventh on the way to an adventuresome 68 that also included five birdies and four bogeys.
"Anytime you can come to this event, it's fun," said the wiry American, a self-taught player. "I had a couple of tough shots out there and a few three-putts.
"I wasn't comfortable on greens but other than that, three under, can't get too mad at that. The weather was perfect, the fans were great. It was good."
Bradley, winner of last year's US PGA Championship, gained his spot in the field as the first alternate after Northern Ireland's Rory McIlroy pulled out due to a scheduling conflict.
McIlroy, who clinched his second Major title by a staggering eight shots at this year's US PGA Championship, had already committed to the European Tour's BMW Masters, being played this week in China.
The Grand Slam of Golf, billed as "the most exclusive tournament in golf", was held in Hawaii from 1991 to 2006 before moving to Bermuda in 2007.
- Sports & Recreation
- Port Royal Golf Course
- Bubba Watson