Atwal, a former winner on the PGA Tour, vaulted from a lowly 150th to tied 31st at six-under 138 at the end of the second round of the gruelling six-round qualifiers.
Meanwhile, Daniel Chopra, 20th overnight, added a 66 at Nicklaus Course to his first round 68 at the Stadium Course, and moved to tied fifth after two rounds at 10-under 134.
Bhavik Patel, an American of Indian origin, shot 69 and is now tied 39th at five-under 139.
The leader after two rounds is a 20-year-old Korean, Meen Whee Kim (68-63). Kim shot nine-under 63 at the TPC and is at 13-under 131.
Kim is followed by Vaughn Taylor (68-64) and in tied third place is overnight leader Steve Lebrun (64-69) and Richard lee (66-67).
Atwal, who struggled to a two-over 74 on the first day made no errors on the second. He birdied the second, fourth sixth and then eagled the seventh to turn in five-under.
Birdies on 10th and 11th put him at seven-under with seven to play. But he managed only one more birdie after that at 16th, but more importantly did not drop any bogeys.
Kim, a great fan of Tiger Woods, tied the course record at PGA West's Stadium Course with a nine-under 63 to take a one-shot lead through two rounds of Q-school, where the top 25 players (and ties) will receive Tour cards for next season.
