Aree Song, who led after the first round, eagled the 18th to shoot 70 as well. She is one stroke back at minus-13.
U.S. Solheim Cup teammates Juli Inkster (70) and Michele Redman (66) share third place at 10-under-par 206. Sophie Gustafson and Jeong Jang are one shot behind that duo at minus-9.
Women's world No. 1 and three-time champion Annika Sorenstam continues to struggle with her game. She struggled to a 3-over 75 and tumbled into a share of 53rd at 1-under-par 215.
Sorenstam bogeyed the first, but got that stroke back with a birdie on the sixth. She dropped shots on seven and eight to turn at minus-2.
The Swede birdied the 10th, but faltered to bogeys on 12 and 13. After a birdie on 14, Sorenstam bogeyed 15 to slide back to minus-1. She parred her final three holes to finish there.
Lee got off to a good start as she birdied the second on the Prospector Course at Superstition Mountain Golf and Country Club. She made it two straight with birdie at the third. Lee parred six straight holes to make the turn at 14 under.
However, the 27-year-old gave a stroke back to par with a bogey on No. 10. Lee tripped to a three-putt bogey on 11 to fall back to 12 under. She still led by two at the time though.
Lee recovered those lost strokes with birdies on the par-5 13th and par-4 14th. She closed with four pars in a row to end at minus-14.
'I just missed a lot of fairways,' said Lee, who is going for her first tour win. 'So I will focus more on my tee shots Sunday. The wind effected me a lot today.'
Song parred her first four holes, before tripping to a bogey on the fifth. That dropped her four shots behind Lee. Song recovered that lost stroke with her third birdie in three days at the par-5 seventh.
The 19-year-old fell back to 10 under as she bogeyed the 10th. Song atoned for that error with a birdie at the 14th. The Thailand native closed with an eagle at the last to get back within one of Lee's lead.
'It was a nice way to finish, but it was a tough day overall,' said Song. 'The conditions were very different than what we've seen the past few days. I just tried to play a bit more conservative and get birdies when I could. But pars were a good score today.'
Rachel Hetherington, the 2002 winner, fired a 6-under 66 to climb to 8-under-par 208. She was joined in seventh place by Suzann Pettersen (74), Stacy Prammanasudh (69), Catriona Matthew (72), Silvia Cavalleri (71), Il Mi Chung (67), Paula Creamer (74), Candy Hannemann (68) and Cristie Kerr (69). Young-A Yang and Hee-Won Han were one shot back at minus-7.