Willett covered the front nine of the West Course in just 29 shots for the second time in four years on his way to a superb 65 to join Rahm on 11 under par, the Ryder Cup star making an eagle on the 18th to add a 67 to his opening 66.
World number four Justin Rose, who had been doubtful with a knee injury suffered on his manager's stag do, was two shots off the lead alongside Henrik Stenson and Christiaan Bezuidenhout, while Rory McIlroy made the cut with nothing to spare after a 69.
After missing the cut at Wentworth last May Willett was ranked 462nd in the world, but he finished eighth in the Italian Open the following week and finished the year in style by winning the DP World Tour Championship in Dubai, his first victory since the 2016 Masters.
"I was playing well here last year but I had a vasectomy four days before so I don't think that helped," Willett revealed. "I'm not going to lie to you, it was a relatively painful two days of walking."
The pain was compounded by Willett struggling with the effect that numerous injury problems had had on his game and the 31-year-old from Sheffield admitted he found it hard to interact with the fans at the time.
"You're really trying to smile and put a brave face on, but the truth is I wasn't enjoying it and I wasn't playing well," he added. "It is embarrassing, they come and pay money for a ticket, not necessarily to see me play golf, but they want to see good golf and at times I wasn't playing it.
"It's now enjoyable to be playing it and feeling good about yourself. It's nice to actually enjoy crowds and play with a bit of a smile because they don't want to see someone walking around who theoretically has got a pretty nice life, grumpy as sin.
"I wouldn't say I'm back to my best. We're still working on the moves and there's still shots in there that I don't like. But the body is night and day to where it was, the ability to travel around the world and play golf is back and I'm just in a much better place with everything.
"This weekend you're going to have a real good leaderboard and we've put ourselves in a position to be right up there."
Rahm's round did not look on the cards when he bogeyed the first two holes, but the fiery Spaniard kept his famous temper in check and birdied the next four before dropping another shot on the 10th.
The Ryder Cup star regrouped again to birdie the 12th and 13th and hit a superb four-iron approach to the last from 212 yards to set up an eagle from six feet.
Rahm is making his first appearance at Wentworth but said: "I've been hitting it really good and when you are hitting it this good it does not matter if you know the course or not.
"I think it's a great golf course. You can be as aggressive or as conservative as you want off the tee and make it fun that way. I've been having a lot of fun and I think it shows. It's also a special place and an event with a lot of history."
Rose insisted he had not been the worse for wear when he injured his left knee in the south of France, adding: "I just slipped on a wet surface.
"Honest truth is, half an hour of being there, not even a beer in hand, can't even blame it on that. We were having a swim and I slipped on the edge, gone in, my foot's got caught."