Atwal was 6-under 204 overall at the Nationwide Tour's 2008 season-opener, one shot ahead of Chris Smith heading into the final round.
Smith also carded a 68 Saturday and was a 5-under 205. Scott Dunlap, the second-round leader, stumbled to a 73 and was alone in third place at 4-under 206.
Matthew Every (67) was another shot further back at 207, with Benjamin Alvarado (68) and Jarrod Lyle (69) sitting at 208.
In windy conditions, Atwal posted five birdies and three bogeys at a tough Panama Golf Club.
'It certainly didn't feel like five birdies,' Atwal said of his round. 'You just get so into it. You're trying to grind it out on every hole. I didn't hit it all that great today, but I tried to get it in the hole however I could.'
Dunlap surrendered three shots on his first five holes Saturday -- a stretch that was capped by a double-bogey six at No. 5 -- allowing the rest of the field to catch up.
His struggles weren't unique. Only eight of the 62 players who made the second-round cut were under-par after 54 holes.
'I missed it in all the right places I guess,' said Atwal, one of the lucky ones. 'This golf course is all about angles. If you do miss a fairway you've got to miss it in the right spots. The places I missed it I could somehow get it around the green where I could make a good up-and-down.'
Atwal, 34, gained experience in nearly 100 starts on the PGA TOUR over the last three seasons. But Saturday marked his first overnight lead since a 2003 tournament on the Asian Tour.
'I don't really know if it's good or bad that I haven't held the lead after 54 holes in a while, and I don't really care,' Atwal said. 'As long as I'm in this position, I love it. I like where I'm at. Obviously I'm doing something well.'
Smith carries some measure of experience into the final round. A one-time winner on the PGA TOUR (2002 Buick Classic), he made nearly $4.7 million on that circuit.
'I feel like I've tried way too hard lately,' said Smith. 'I've tried to force the issue when I get on the golf course ... I'm not going to do that this year. I'm just going to play and try to let the rounds come to me and let the tournaments come to me like I used to do. I'm going to enjoy the fact that I'm here and try not to get hung up on what I'm shooting.'