The Sheffield golfer carded a four under par 68 to sit three shots behind overnight leader Matt Wallace in a tie for fifth place.
Willett had struggled early on with a double bogey sixth on the third but recovered superbly with three consecutive birdies on five through seven and dropped no further shots.
A disastrous penultimate hole left Matt Fitzpatrick with a fight to make the cut at Wentworth.
The Sheffield golfer hit his approach on the par five 17th out of bounds, and repeated the same miscue immediately afterwards.
He recovered to card an eight, which sent him over par and into a tie for 85th.
Wallace believes his decision to part company with caddie Dave McNeilly is paying dividends after claiming the lead in the BMW PGA Championship at Wentworth.
Wallace carded an eagle and five birdies in a flawless opening 65 to enjoy a one-shot lead over former Open champion Henrik Stenson and Spain's Jon Rahm, with Justin Rose a shot further back.
Willett and Paul Casey were part of a seven-strong group on four under par, but pre-tournament favourite Rory McIlroy slumped to a four-over-par 76 after playing the back nine in 42 shots.
Wallace was heavily criticised on social media for berating McNeilly towards the end of June's BMW International Open, where the defending champion twice found water on the 72nd hole as he chased a birdie to force a play-off.
The 29-year-old Londoner initially cleared the air with McNeilly and they worked together at the Open at Royal Portrush - where Wallace played alongside Tiger Woods for the first two days - but the split came four days after the World Golf Championship event in Memphis.
"It was the hardest decision I've had to make in my career," Wallace said. "He's done so much for me.
"He's got me to where I am today but it was a time and a decision that I wanted to be done and change something up.
"I didn't want to keep being like that with Dave and Dave like that with me. Dave is 67 and he wants to improve every day and that is why he was my guy for so long. He was great for me and I am sure I pushed him on as well.
"I don't think I want to change too much of me, I want to keep the fire. Around the Open I was changing my emotions inside and that was affecting the way I played.
"I hope I don't have to make any decisions ever like that again, but it's a business and it's what everyone keeps telling me. There are plenty of guys out here who sacked many a caddie and this is my first one. I wouldn't say it was a sacking, it was a parting of ways.
"Sometimes you need to make those hard decisions to go forward. I felt like it was the right one and it is producing some good stuff at the moment."
Stenson's 66 equalled his lowest score at Wentworth from 2001 and was completed in style with an eagle on the last, despite his putt from off the green hopping into the air from a pitchmark.
"I have always found this quite a tricky golf course with the dog-legs and little humps, it's not easy to keep hitting fairways and with the trees on both sides it gives you a little claustrophobic feel at times," Stenson said.
"Looking back at my career, I don't think I've had too many wins with a decent round. It sets up the week nicely and I just hope I can continue with that."
Rose's participation had been in doubt after he injured his left knee in a slip at home, but the world number four birdied four of his last eight holes to card an opening 67.
"On Monday I went for a scan and I didn't know if I had torn my meniscus or ACL," Rose said. "But there's no ligament damage, it's just a strain and some bruising so I feel quite lucky."
McIlroy no doubt did not feel so fortunate after squandering a flying start - he eagled the fourth and birdied the fifth - with a terrible finish, the world number two playing his last 11 holes in seven over par.
After three dropped shots in a row from the eighth, McIlroy stopped the rot with a birdie on the par-five 12th but then bogeyed the 13th and 15th and ran up a double-bogey seven on the 17th after pulling his drive out of bounds.
Another wild drive followed on the last and led to a closing bogey, after which McIlroy declined to talk to waiting reporters.