The 25-year-old shares second place with American Lilla Vu, who went one stroke better than her opening round 67 in her second effort.
Ko started her round in familiar fashion, again with a birdie on the opening hole. She then dropped a shot on the third, but quickly recovered that with a birdie on the fifth.
A birdie on the ninth followed by a bogey on the 11th continued the trend, before Ko carded back-to-back birdies on the 12th and 13th.
Despite a bogey on the penultimate hole, Ko was able to recover with a birdie on 18 to head into the weekend on the right note.
The Saudi Ladies International has a US$5m prize fund, supported by the Saudi Public Investment Fund, with the winner taking home US$750,000 ($NZ1.2m).