Goosen completed 54 holes at 9-under-par 207, while Lara fired a 5-under 67 to get to minus-8. Lee Westwood remained in the hunt with a 71 to take third place at 7-under-par 209, with Paul Broadhurst and Peter O'Malley one stroke further back at minus-6.
Goosen stumbled to open his round as he missed a 5-foot par save at the first to slip to minus-8. He settled in to par seven straight holes.
The South African dropped back to 7 under with a bogey at the par-4 ninth. At that point, he was tied in the lead with Westwood, who was playing one group ahead of Goosen.
Westwood had knocked in a short birdie putt at the eighth, but then made a mess of the ninth en route to a double bogey. He came right back at the 10th when he drained a lengthy eagle to putt to return to 7 under.
Goosen reclaimed the lead at minus-8 with a 3-foot birdie putt at the 10th on the South Course at The K Club.
Meanwhile, Lara was making a charge from out of nowhere. He drained the sixth birdie of his round at the 16th to join Goosen in the lead at minus-8. Lara parred his final two holes for second place.
Goosen picked up his final birdie at the 15th to retake the lead. He parred his final three holes to hold a one-shot edge entering the final round.
'I struggled a little bit today and was stuck between clubs on a lot of occasions and hit a lot of poor shots,' Goosen said. 'It wasn't a great day. Obviously I am going to try and play a bit better and give myself more chances tomorrow. The first two rounds I played very well, but I played some rubbish today.'
Westwood, who also birdied 15, stumbled to a bogey at the 16th to drop back to minus-7, two shots behind Goosen.
'It was a bit frustrating out there. I felt I played better than 71,' said Westwood. 'I either holed from 3 feet or 60 feet. At least there is no damage now. If you have a day when you don't hole any putts and don't do any damage then you have to take consolation from that.'
Lara had bogeyed the third, but came right back with a birdie at the fourth. He picked up three birdies over a five-hole stretch from the seventh. The Spaniard picked up another birdie at 14, before his birdie on 16 gave him a temporary share of the lead.
'The five birdies between 10 and 14 on Thursday are why I am in this position now. Those and the hole in one,' said Lara, of his Friday ace. 'I took confidence from the good things that were happening and I have played really well the last two days and putted nicely.'
Nick O'Hern, one of three first-round leaders, notched his second straight even-par 72 to remain at 5-under-par 211. Gary Evans, Maarten Lafeber, Paul McGinley and Henrik Stenson are one stroke further back at minus-4.
Thongchai Jaidee posted a 69 to move to 3-under-par 213. Australian Richard Green fired the round of the day as he posted a 6-under 66 to climb to 2-under-par 214. He is joined there by Niclas Fasth and Kenneth Ferrie.
Phillip Price, the defending champion, carded a 2-under 70 to move to 1-over-par 217, where he stands in a tie for 22nd.