Overnight leader Paul Casey struggled to a third-round 74 to fall one stroke behind Faldo. Casey is joined in second place at 10-under 206 by Niclas Fasth and Peter Lonard.
David Lynn and Steve Webster are one stroke further back at 9-under, while defending champion Ernie Els climbed into a tie for seventh at minus-8 208. Els, who shot a 66 Saturday, is tied for seventh with David Smail.
Thomas Bjorn headlines a group of seven players at minus-7 209. Including this group, there are 16 players within four strokes of the lead heading into the final round.
Faldo, who entered the day eight shots off the lead, birdied his first three holes to climb to 7-under. The three-time British Open champion rolled in a lengthy eagle putt on nine to make the turn at 9-under.
'I saw Ernie [Els] making a really good run and thought What the hell is he shooting? Then I eagled nine and started thinking I had a great round going,' said Faldo. 'The last couple of days I tripped up on my back nine so I was really concentrating hard hitting the shots where I wanted to and playing smart.'
Faldo climbed to minus-10 with a birdie on the 10th. He parred five straight holes and during that time was tied for the lead, as Casey struggled on the back nine.
Faldo, who last won an individual title in 1997, posted his final birdie of the day at 16, and claimed the lead for good when Casey bogeyed 15.
'That was a really good day,' said Faldo. 'I did an awful lot of good things for all 18 holes. I finished poorly yesterday and went to the range. I went to the range and made the decision that my backswing was good enough to forget about it and start concentrating on different follow throughs and what type of shot I was trying to hit.'
Casey, who held at least a share of the lead after the first two rounds, posted four bogeys and a double bogey while shooting 74 Saturday. He started with a bogey at the second before birdieing the fifth.
Casey bogeyed six and eight, then made a pair of birdies around the turn to stay at even-par for his round through 10 holes. He carded his final birdie at 12 to take a two-shot lead.
The 2001 Scottish PGA Champion dropped back into a share of the lead with a double bogey at 13. Casey then fell out of the lead with a bogey on 15.
Lonard and Fasth both had solid rounds to climb into a share of second place. Lonard, the reigning Australian Masters champion, posted back-to-back birdies starting at the fourth and again at the ninth to move to 9-under. He birdied the 12th, but three-putted 13 to give a shot back. His final birdie came at 17 to give him a third round 67.
Fasth, who shot a 68 Saturday, birdied the fourth, but gave the shot back with a bogey at eight. The 2001 British Open runner-up came back with birdies at nine and 10 to get to minus-8. He birdied 16 for the third straight round before notching his final birdie on No. 17.
Els, who seemed to be tiring after four tournaments in three different countries over the last four weeks, shot a 6-under 66 to leap into seventh place. He posted consecutive birdies starting at the second, then later birdied four of five holes starting at the seventh.
Els had a chance to be 9-under, but he bogeyed the final hole after birdieing the 17th.
'I left quite a few shots out there, especially on the back nine,' said Els. 'Tee to green I was back to where I was a couple of weeks ago. That felt really good. My rhythm and everything started to fall into place.'