Davies, the defending champion and the leading money-winner on this year's US LPGA Tour, recorded five birdies in her opening nine holes and then ended her round with another four.
Her round was only one away from a career-best 10-under and keeps her on course to become the first player in history - male or female - to win tournaments on five tours in a calender year.
She has won three times in the United States this year, twice in Europe and on the Asian and Japanese Tours.
"The fairways are hard and the ball is running if you drive it well, so there are plenty of birdie opportunities on this course," said Davies, who leads from Corinne Dibnah and Karrie Webb, both of Australia, plus Scotland's Dale Reid and Jan Higgins of New Zealand, who all had rounds of 67.
"The greens are probably the best I've played on all year, and we play on some great greens in the United States," Davies said.
Dibnah, who has never won a tournament in her homeland, chipped in for an eagle at the fourth, and had five birdies and a solitary bogey in her round of 67.
"I'm pleased with the way I'm hitting it, but what can you say about Laura?" she asked. "The way she is hitting it, she is capable of absolutely anything.
"It is just up to the rest of us to hang in there and play our own games. A lot can happen with three days remaining."
AUSTRALIAN MASTERS (Royal Pines, Gold Coast): Leading first-round scores: 64 L Davies (GB). 67 C Dibnah (Aus), J Higgins (NZ), D Reid (GB), K Webb. 68 K Lunn (Aus), A Nicholas (GB). 69 T Hanson (US), L Garbacz (US), K Marshall (GB), J Crafter (Aus), A Sorenstam (Swe), M Morris (US), P Meunier (Fr). 70 J Mills, A Fruhwirth (US), C Rasmussen (Den), K Cathrein (US), F Fehlauer (Ger), S Gautrey (Aus). 72 C Hall (GB). 74 K Douglas (GB).Reuse content