At even par 142, Lahiri was tied 67th as the cut fell at even par and he made it on the line. He moved up 11 places from his first round 78th. The Indian golfer had a two-over 73 in the first round.
Meanwhile, Masters winner, Jordan Spieth, who shot 74 in the first round blazed the course with nine birdies and carded 62 in the second round to make a smart move 86 places up and was now tied seventh.
Merritt had nine birdies over his final 10 holes to surge on top. He ended his round with four straight birdies, including a 5-footer on the signature lighthouse hole, No. 18, to tie the course record.
The American golfer is now four ahead of Matt Kuchar (66) and John Merrick (65).
Also Read
Past RBC Heritage winners and US Open champions Graeme McDowell and Jim Furyk were seven-under along with Kevin Kisner. Furyk had a 64, Kisner shot 67 and McDowell 69. Spieth was a shot behind.
Lahiri, who tied 49th at Masters, continued to miss short putts at Hilton Head. Of his four birdies, two were 20 inches or inside, showing some good iron play. His other two birdies were 14 feet (11th) and nine feet (17th), but he missed a seven footer on his last hole for a birdie on ninth.
He also missed a nine-footer for bogey on par-3 fourth, where he went into the water and finally came out with a double bogey. But for that double, he showed good form.