The Toronto native warmed up with a perfectly executed quad toeloop-triple toeloop jump, nailed a triple axel and a triple lutz and rounded his program off with a lightning fast step sequence to score 98.52 points. That bettered his own mark of 98.37 set at the worlds in March.
"I was ecstatic at the way I skated," Chan said. "I didn't even know I broke the record. If I can make a world record at the Olympics it would be amazing. I'm looking at the Olympics so I'm really focused on that. A world record is a nice thing to say and a nice thing to have"
The 22-year-old Chan was at his graceful best to the sounds of Rachmaninov's "Elegie in E flat" and looks well set to win the Paris event for the fourth time.
"It was nice to be in a big space, because that's where I can really flow and push," Chan said. "I didn't feel perfect in the air on a lot of the jumps, but that's where training comes into play where you don't have the best air position or jump but automatic pilot kicks in."
Chan's performance inspired Japanese skater Yuzuru Hanyu, who followed Chan onto the ice and got the crowd going with an energetic performance to move into second place with 95.37.
"I still have something to improve, like steps and spins, so I'm going to keep improving on that," Hanyu said through an interpreter.
American skater Jason Brown is in third place with 84.77 heading into Saturday's free skate.
"To be at the same event as these guys is amazing," the 18-year-old Brown said. "I hope that this is just the beginning for the rest of my career."
Earlier, Olympic runners-up Pang Qing and Tong Jian took the lead in the pairs competition after the short program ahead of world bronze medallists Meagan Duhamel and Eric Radford of Canada.
The Chinese pair scored 67.69 points with Duhamel, from Lively, Ont., and Radford, from Balmertown, Ont., tallying 66.07.
"We've never won this event and this is our last season, so it will be our last chance," the 34-year-old Tong said through a translator. "As it's the last time, it's also a little bit nostalgic. The crowd is always very welcoming here."
The Canadians were among the favourites but Duhamel landed heavily early on when attempting a triple lutz. They led after the short at Skate Canada last month but slipped from first to third after a flawed free skate.
"We felt that we skated the program better than we did at Skate Canada," said Duhamel. "Obviously there's a big mistake and that's three years in a row where we find ourselves second after the short program so I guess that's our place. We will do better in the long program and I will land a triple lutz."
Competing in their first Grand Prix of the season, Russians Vera Bazarova and Yuri Larionov are in third place with 65.67.
"I made a mistake on the jump, which was unexpected," Bazarova said through a translator.
The ice dance and women's short programs followed later Friday.