Montgomerie, an absentee this week because of the illness of his father James, has been European No 1 for the past three years and is determined to retain his position.
Woosnam, who finished on top in 1987 and 1990, needs to finish first or second in Stuttgart to go to the front of the money list. Victory and the pounds 116,000 first prize for the 38-year-old Welshman, who trails Montgomerie by just over pounds 65,000, would move him pounds 50,000 clear with the season drawing to a close.
After his first round 64, Woosnam was lying in joint third place behind Paul Broadhurst and Raymond Russell, but his second 64, for a 14-under- par aggregate of 128, has taken him into the outright lead, albeit just one shot ahead of Sweden's Robert Karlsson and two ahead of the Spaniard Fernando Rocca and Iain Pyman of Leeds.
Both the London-based Karlsson and Roger Chapman equalled the course record of 62, set by Broadhurst on Thursday, as the European Tour golfers tore the Nippenburg course apart for the second successive day.
Chapman had packed his bags, checked out of his hotel and was preparing to return to England last night before his round yesterday. He had shot a one-over-par first round 72 and was lying in joint 129th place. He understandably considered he had no chance of making the halfway cut on a course where 128 of the 156-strong field had played to par or better on the opening day.
Yesterday, however, starting at the 10th, he began quietly with three successive pars - but then came to life. He eagled the 13th with a drive, three-iron and 20ft putt, then had birdies at the 15th, 17th, first, fifth, sixth, seventh and ninth to go from one over to eight under.
Karlsson played his last nine holes in 28 to be the early leader but Woosnam, shooting 29 for his last nine, went in front after sinking a six-foot putt on the final green for a birdie.
Woosnam pointed out he had shot the back nine in 30 on Thursday and 29 yesterday - 59 for 18 holes - and admitted: "I guess the realistic par here is 68, not 71, maybe 67. There are a lot of short par fours as well as all the fives being in range. You feel you can birdie every hole."
n Lotta Neumann of Sweden stormed to a course record 65 to open up a six-stroke lead on the field after the second round of the Trygg Hansa Open at Haninge near Stockholm yesterday. With a 13-under-par halfway aggregate of 133, Neumann leads from Joanne Morley of Cheshire with Alison Nicholas and the US Open champion Annika Sorenstam one stroke further behind.