Robyn Choi heads the Aussie challenge, following her first-round 70 with a 71 to be at one-under-par 141, six shots off the lead entering the weekend.
The next highest Aussie is Hannah Green, two-over after carding a 73. But Cassie Porter's ambitions disintegrated with a round of 78 leaving her six over, two short of the halfway cut.
The tournament is also over for fellow Australians Minjee Lee (75-74), Karis Davidson (76-74), Kelsey Bennett (77-74), Grace Kim (75-77), Steph Kyriacou (75-79) and Justice Bosio (79-78).
Triple major winner Lee went round in one shot fewer than on Thursday but was seven over, Davidson eight over, Bennett nine over, Kim 10 over and Bosio 15 over.
Ryu recovered from a shaky start to her second round to post a two-under 69 and reach seven under for the tournament at a sun-baked Royal Lytham on Friday.
The world No.3 Ryu, bidding for her third successive major triumph after winning the PGA Championship and this month's Evian Championship, bogeyed her third hole and double-bogeyed the fifth to slip back.
But the South Korean responded superbly and was flawless after that with five birdies, including one on the 18th that gave her the outright lead heading into the weekend.
Ryu leads by a stroke from Japan's Shiho Kuwaki, who went out early and carded a solid one-under 70 to be the long-time clubhouse leader on a day marked by extremely slow play with the afternoon groups taking well over five hours.
Defending champion Miyu Yamashita was packing her bags for home after a quadruple bogey at the par-four 18th meant she missed the cut with a second-round 77.
Overnight leader Jeeno Thitikul of Thailand went round in nine more shots than her stunning first-round 64 as a two-over 73 left her tied with American Yealimi Noh, two shots back.
"I didn't hit close to the pins as I did yesterday. Maybe the pin positions were kind of hard," Thitikul said by way of explanation for her relative struggle. "Just going to have to be patient at the weekend."
World No.1 Nelly Korda, like Ryu bidding for a third major this season, hit back after an opening-round 73 with a six-birdie 68 putting her in the mix for the weekend at one under along with 2024 champion Lydia Ko of New Zealand.
England's world No.5 Lottie Woad maintained her steady progress with a level-par 71 although a bogey at the 18th, only her third in two rounds, where she drove into a deep pot bunker, left her five shots adrift of Ryu.
Woad is trying to become the first home winner since Georgia Hall, also at Lytham, in 2018.
She was in a group of eight players packed together on two-under, including compatriot Charley Hull.
With AAP
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