Padraig Harrington bogeyed his 16th and 17th holes on Saturday, but birdied 18 to polish off a 3-under 68 at Carnoustie. He is alone in second place at minus-12.
For the first three rounds, players competed over three courses -- Kingsbarns, Carnoustie and the Old Course at St. Andrews. Sunday's final round will be staged at St. Andrews.
American Edward Loar shot a 2-under 70 at St. Andrews and is alone in third place at 9-under-par 206. Ernie Els and Vijay Singh both played Carnoustie on Saturday with the South African posting an even-par 71 to Singh's 72. The pair is knotted at minus-8.
Temperatures were low at all three courses and, with the wind, all played difficultly on Saturday.
Dredge broke into red figures for the first time Saturday with a birdie at the par-5 third. He parred his next five holes, but dropped a shot at the par-5 ninth.
The Welshman reclaimed the lost stroke at the very next hole with a birdie at 10. Once again, Dredge went on a par run, which was a good score, with five in a row.
Dredge reached 14 under par thanks to a birdie at the par-5 16th, but that two-stroke margin was short-lived as he bogeyed No. 17. Dredge parred the closing hole to take a one-shot lead into Sunday.
Dredge will be in search of his third European Tour victory and second of the season. Last month, Dredge cruised to the winner's circle at the European Masters, something that will give him confidence in the final round.
'I take some confidence from my victory in Switzerland and I'm looking forward to tomorrow,' said Dredge. 'I will be playing with Padraig Harrington and he's a good guy, so I will enjoy that.'
Harrington tallied birdies at three and six to make the turn at 2-under-par 34. He drained a 20-foot birdie putt at the 10th, but bogeyed the par-4 11th.
The Irishman sank a 30-foot birdie putt at the 12th and converted a short birdie putt at 14. He was cruising up the leaderboard, but problems hit late in his round.
At the par-3 16th, Harrington missed a 3-footer for par. One hole later, Harrington was in a bunker with his second after some indecision about club choice and made another bogey.
Harrington got one back at 18 when his 8-foot birdie putt found the bottom of the cup.
'I played well early on and hit it superb for 11 holes,' said Harrington, who is still in the mix for the Order of Merit title with a win late in the season. 'Coming home, I hit some good and some bad shots and made some bogeys. While I was disappointed to make the bogeys it was a tough, tough golf course.'
Joakim Backstrom (67), 1999 British Open champion Paul Lawrie (72) and European Ryder Cupper Robert Karlsson (71) are knotted in sixth place at minus-7.
Simon Khan (71), Hennie Otto (71), Simon Dyson (75), Nick Dougherty (71), Anthony Wall (69) and another member of Ian Woosnam's victorious Ryder Cup team, Henrik Stenson (71), share ninth place at 6-under-par 209.
Several big-name players missed the 54-hole cut of 1-under-par 214. Paul McGinley (215), David Howell (217), defending champion Colin Montgomerie (220) and Darren Clarke (224) all missed Sunday's final round.