The South Korean won the title as a raw rookie at Sunningdale in 2008 and the cheery 24-year-old set her sights on regaining the crown with a great second-round 64 which contained six birdies and an eagle.
On nine under par, she opened up a five-shot gap on her playing partner and fellow South Korean, Inbee Park (68), while Japan's Mika Miyazato (70) and Australia's Karrie Webb (70) shared third place on three under.
Gale-force winds had wiped out Friday's play so there was great relief all round when morning was greeted by blue skies and a light breeze. The players duly took advantage and none more so than Shin. Starting at the 10th, she chipped in for an eagle three and followed up with three straight birdies.
Another birdie followed at the 16th and she reached the turn in an amazing 31 shots. The second half included further gains at the fourth and seventh.
"My goal at the start was to shoot one under par in every round so today was a really big surprise," she said. "But I made such a great start and didn't have one bogey or go in one bunker."
The players face 36-holes today, and Shin, who won the Kingsmill Championship in America on Monday after beating Paula Creamer in a nine-hole play-off, is prepared for another long day.
"I was tired earlier in the week but I got a good rest yesterday," said the former world No 1 who underwent a minor wrist operation and missed two months play in June and July. "I'll just try to stay focused all day."
Taiwan's Yani Tseng, who won at Birkdale in 2010 and again at Carnoustie last year, repeated her opening 72 for level par and nine shots is certainly not an insurmountable gap to close over two rounds.
Lydia Ko, the 15-year-old New Zealand amateur, also stayed in the hunt with a 71 for one under par. Last month, she became the youngest winner of an LPGA tournament at the Canadian Open and she seems set for another jaw-dropping result in her first Major. Another amateur, England's 21-year-old Holly Clyburn, was the best of the British players on one over following a 73, but Woburn's 16-year-old Charley Hull, one off the lead after an opening 71, crashed out with an 80.
For the two Scots in the field, it has been a disappointing championship. But Catriona Matthew at least has the chance to make an impact in today's marathon 36-holes. The 2009 Champion at Royal Lytham and St Annes seemed set to be joining Carly Booth – two 77s for 10 over par – on the wrong side of the cut mark.
But a birdie two at the 13th and an even better eagle at the long 16th helped her rescue a 73 for five over par and she made it with nothing to spare.