Don Pooley fired a 7-under 65 on Saturday and is alone in fifth place at 10-under-par 206. David Eger (65), Doug Tewell (65) and Peter Jacobsen (71) are knotted in sixth place at minus-9.
Irwin traded a bogey and a birdie over his first six holes, then bogeyed No. 8. He reclaimed the lost stroke with a birdie at the ninth to get him within one of the lead.
At the 10th, Irwin drained a 15-footer for birdie to share the lead at 10 under par. McKnight pulled ahead with a birdie of his own at the 10th, but Irwin matched him atop the leaderboard with a 7-foot birdie putt at the 12th.
Irwin's drive at the 14th left him no options but pitching back into the fairway. His third shot from 148 yards landed 12 feet from the hole, but the all-time wins leader on the Champions Tour could not convert the par-saving putt.
'That's a hole where if you average four for the week, you're doing well and I'm averaging par,' said Irwin. 'It's those kind of things. You have to say, 'this is a mistake I made, take it and don't make it worse.'
McKnight dropped a shot at the same hole to fall to 11 under par, but he reclaimed the lost stroke with a 9-foot birdie putt at the 15th. McKnight, a Champions Tour rookie, found himself two ahead of Irwin, but the 1999 champion of this event played brilliantly down the stretch.
At the 16th, Irwin landed in the fairway off the tee, then hit his second 28 feet left of the flag. He rolled in the birdie putt to get within one of the lead.
Irwin had the length to reach the par-5 17th green in two, but elected to lay up short of the putting surface. He hit a wedge to 8 feet and sank the putt to reclaim a share of the lead at minus-12.
He parred 18, then watched as McKnight made a mess of the 18th.
McKnight split the fairway with his drive, but pushed his approach into the rough on the right side. He tried some type of a flop shot, but pitched it over the hole into a bunker on the other side. McKnight blasted out to 4 feet and made the bogey putt to fall one behind Irwin.
'I played a pretty solid round today,' said McKnight, who finished second at the 2004 Q-school. 'I had a couple of bad shots that cost me. I made the bogey on 18 and I was probably lucky to do that.'
McKnight, like everyone else in the field, will now be looking at Irwin, who won this title by seven shots over Graham Marsh in 1999.
'I'm trying to play this course intelligently,' said Irwin. 'It's the kind of course where you try to do some things that aren't there, you can pay the penalty. I've done that a few times. I tried to use experience and good judgment today.'
Irwin already has two titles in 2005, the Turtle Bay Championship and the Outback Steakhouse Pro-Am. He owns the Champions Tour record with 42 victories, but he has only two major championships since the start of the 2000 season. If he were to win on Sunday, Irwin would tie Jack Nicklaus for first in Champions Tour majors with eight.
Gary McCord had it to 11 under thanks to an eagle at the 17th, but a double bogey at the last knocked him down the leaderboard. He carded a 3-under 69 and is tied for ninth place with Tom Watson (70), Morris Hatalsky (70), Isao Aoki (73) and last week's Commerce Bank Championship winner Ron Streck (72). The group came in at 8-under-par 208.