Casey, whose year has been blighted by injuries, hit a second-round 66 to move to eight under par, three shots adrift of leader Freddie Jacobson.
Jacobson also returned a six-under-par 66 to open a one-shot lead over 2010 Open champion Louis Oosthuizen.
The South African equalled the lowest round in the tournament's history with a 63 to sit alongside Adam Scott (65).
But Casey's round was the most eye-catching given the miserable year he has endured - he has suffered with a mysterious toe injury which made swinging the golf club a painful exercise.
After fearing he was suffering with arthritis or a broken toe in his right foot, the problem was finally diagnosed as "turf toe". He is responding well to treatment and his game is improving as well.Continue reading the main story Events played: 22Cuts made: 18Victories: 2 - Volvo Golf Champions, Bahrain, January; Shinhan Donghae Open, Korea, September Top 10: 1 - Frys.com Open, California, OctoberMajors: Masters - T38th, US Open - cut, Open - 54th, US PGA - T72nd
"The golf I played is the golf I remember playing," Casey said after moving into a share of fifth place. "It's just been a while since I last played it.
"I haven't been on top of many leaderboards lately. I did have a win in Korea a few weeks back but it wasn't a stacked field as it is here this week. The world's best are here."
Casey suffered only one dropped shot in a round that included seven birdies and he is looking to capitalise on his strong position to make a jump start to Ryder Cup qualifying.
"I kind of feel I'm working towards next year already," he added.
Jacobson was bogey-free as he moved to 11 under par. The American-based Swede is considering rejoining the European Tour to give himself a chance of a Ryder Cup debut next year.
Scott's 65 included nine birdies and two bogeys, while there were no dropped shots in Oosthuizen's impeccable round.
First-round leader Keegan Bradley dropped his first stroke of the tournament at the ninth en route to a 70 that leaves the American two behind in fourth place.
Lee Westwood birdied three of the last six holes for a 68 that took the world number two to seven under par, four shots off the lead and one ahead of Simon Dyson (69), Graeme McDowell (69), Justin Rose (70) and Ian Poulter (68).
Rory McIlroy had three birdies in a row from the sixth but failed to sustain the momentum in a 69 that leaves the US Open champion in a share of 17th place at five under par.