MELBOURNE, 21 Feb 2015 (AFP) - The New Zealand teenager's usual birdie haul eluded her, with searing temperatures baking the greens.
She collected three birdies against two bogeys in a round of one-under 72 to move to seven under 212 for the tournament.
Ariya had three birdies and two bogeys to stay with Ko in what is shaping as a titanic battle in the final round.
At 19 and in an injury-interrupted career, the Thai star has never finished worse than 11th in seven previous LPGA Tour starts.
Ko said conditions were so tough it was like playing in a major.
"You hit in on to the green and you have this humungous break," she said.
"It's tough in every aspect... it does feel like a major."
While Ko will start favourite in Sunday's final round, South Korea's Amy Yang laid down a challenge after a three-under 70 to be a shotback at six under 213.
South Korea's Jang Ha-Na, who held the overnight lead with Ko and Ariya, signed for a 76 to drop back to a share of sixth.
Defending champion Karrie Webb was out on course early and had an impressive round of two-under to be in a tie for 27th at three over.
Ko said navigating Royal Melbourne's greens was so tough she predicted that 10-under would be enough to take the title on Sunday, particularly if the wind strengthened.
"Sometimes it's guess work so I think a couple under par would be good and that's going to be my goal," Ko said.
The best score of the third round was a four-under par 69 by South Korea's Lee Il-Hee, who would be in contention but for a shocking second round 82.
Leading third-round scores in the LPGA Women's Australian Open at Royal Melbourne (par 73) on Saturday (Australia unless stated):
212 - Ariya Jutanugarn (THA) 69-71-72, Lydia Ko (NZL) 70-70-72
213 - Amy Yang (KOR) 73-70-70
215 - Katherine Kirk 72-73-70, Julieta Granada (PAR) 73-72-70
216 - Jang Ha-Na (KOR) 71-69-76
218 - Paz Echeverria (CHI) 71-76-71, Chella Choi (KOR) 72-75-71, Beatriz Recari (ESP) 75-71-72, Gwladys Nocera (FRA) 71-73-74, Jessica Korda (USA) 72-71-75, Charley Hull (ENG) 71-71-76
219 - Lee Il-Hee KOR) 68-82-69, Beth Allen (USA) 78-71-70, Minjee Lee 76-71-72, Mina Harigae (USA) 75-71-73
220 - Q Baek (KOR) 77-72-71, Catriona Matthew (SCO) 74-74-72, Marianne Skarpnord (NOR) 75-72-73, Melissa Reid (ENG) 71-74-75
221 - Pernilla Lindberg (SWE) 76-74-71, Choi Na-Yeon (KOR) 74-74-73, Mika Miyazato (JPN) 73-74-74, Jenny Shin (USA) 76-71-74, Marion Ricordeau (FRA) 72-73-76, Lee Mi-Hyang (KOR) 75-70-76
222 - Karrie Webb 73-78-71, Rachel Hetherington 73-78-71, Ryu So-Yeon (KOR) 77-74-71, Mo Martin (USA) 77-73-72, Marina Alex (USA) 72-77-73, Sydnee Michaels (USA) 73-76-73, Laetitia Beck (ISR) 78-71-73, Feng Shanshan (CHN) 74-74-74, Kelly Tan (MAS) 74-73-75