Yan and Buhai share lead at LA Championship
But on a day of low scoring at El Caballero Country Club, Sweden's Frida Kinhult was just a shot off the leading pair and a chasing pack of five were just a further stroke behind.
Liu made a shaky start with a bogey on her opening hold, the par-4 10th, but she was electric from then on making birdies on three of her next four holes before an eagle on the par-5 16th.
She finished her round with three birdies in a row and carded her lowest score on the LPGA Tour.
"I think on my first hole I was a little nervous. I had high expectations for myself and I was nervous," said the 29-year-old, searching for her first win on the LPGA Tour which she joined in 2018.
"I got bogey and before the next hole I told myself, 'You have to be calm and you have to be confident and be brave. You can do it.' I just talked with myself," she said.
Buhai, the 2022 British Open winner, was blemish free through her round, starting with a birdie on the tenth.
"Obviously any day you have a bogey-free round, that's a good day. I was very patient; hit a lot of good shots. I mean, you have to hole a lot of good putts as well. But I felt the pins were in locations we could access them today as long as you use the slopes correctly," she said.
"I feel that's kind of what this course is like. If you hit it into the right bowls you'll get good results; otherwise you can short side yourself very easily and it can't be fun," added the 35-year old.
Kinhult was also bogey-free and finished her round off in style with birdies on each of the last three holes although she accepted she had relied on her putter.
"I guess it was a smooth ride. Saved maybe two or three pars from, I don't know, six, nine footers. Other than that... golf felt easy for once, so hopefully we'll enjoy that ride the next few days as well," she said.
The chasing pack on 7-under includes South Korean trio Jenny Shin, Chun In-gee and Lee Jeong-eun along with China's Miranda Wang and Sweeden's Madelene Sagstrom.
Sagstrom, who tasted victory in the LPGA Match Play event in Las Vegas earlier this month, ended her round with a hole-in-one on the par-3 ninth her first ever ace on the tour.
But with a tight leaderboard, American Nelly Korda, last year's Tour Player of the Year, who racked up seven victories in 2024, was tied for 15th but was just four shots off the lead.
Korda made three bogeys on her round but all of them were three putts after she shit 18 out of 18 greens.
Her round was saved by a streak of four straight birdies on her back nine.