Gulbis also carded a 66 and finished 36 holes at minus-11. Julieta Granada fired a 7-under 65 on Friday and is alone in third place at 10-under-par 134. Lorena Ochoa, the first-round leader, shot a 1-under 71 and is in sole possession of fourth place at minus-9.
Michelle Wie and Morgan Pressel continue to stay close to each other on the leaderboard. Both shot rounds of 2-under 70 in the second round and are part of a group tied for ninth place at minus-7.
'I still feel like I have a chance tomorrow, if I get things going tomorrow hopefully I'll be able to do that,' said Wie. 'I hope tomorrow that even if I don't hit a good shot, I'll still make pars and I'll keep things going.'
They will all be chasing Lee, who won the money title last year on the Futures Tour.
Lee did not fly out of the gate on Friday as she bogeyed the par-5 opening hole when she two-putted from 4 feet. That would be her final miscue of the second round for the 20-year-old.
At the third, Lee hit a 7-iron to 5 feet and converted the birdie putt. She parred her next two holes, but then hit a 6-iron to 5 feet to set up a birdie at six.
Lee played a 7-iron to 6 feet at the seventh and rolled in the birdie putt. She closed her front nine with a 15-foot birdie putt but slowed down at the start of her back nine.
She parred her first four holes on the second nine, but wedged her third at the par-5 14th to 3 feet. Lee sank the birdie putt and added back-to-back 4-footers for birdie at 16 and 17 to reach 13 under par.
At the closing hole, Lee drove into the rough on the right side and had no choice but to pitch back into the fairway. She needed to get up and down from inside 100 yards and Lee hit her third inside a foot. Lee tapped in for par and will carry a two-shot lead into the final round.
'I have confidence to win this tournament,' said Lee, who has won in her native Korea. 'If I'm putting well, I may have a chance. I'm always confident and always ready.'
Gulbis broke into red figures on Friday with a 5-foot birdie putt at the third. At the par-5 fifth, Gulbis hit a 9-iron to 5 feet and ran home the birdie putt. She made it two straight with another 5-foot birdie putt at six.
Gulbis dropped her only shot of the round at seven when her 8-iron missed the green right. She could not get up and down for par but did close the front nine with a 25-foot birdie putt at nine.
On the back side, Gulbis picked up where she left off on the front nine. At 10, she cashed in on a 12-footer for birdie. Her final two birdies at 14 and 15,both inside 5 feet, put her in excellent position to finally collect her first LPGA Tour title.
'I think it hangs over your head every week from when I was 10 or 11 years old and trying to win tournaments,' said Gulbis, who played on the American Solheim Cup team last year. 'Every single week I try and go out and win tournaments. You just have to keep putting yourself in position. I did that quite a bit last year. I kept putting myself in position and I think I've done that this week, so I look forward to tomorrow.'
Aree Song (67), Wendy Ward (71), Nicole Perrot (69) and Nicole Castrale (68) are tied for fifth place at 8-under-par 136.
Wie and Pressel were joined in ninth place by European Solheim Cup captain Helen Alfredsson (65), Meena Lee (68), Lindsey Wright (66) and Liselotte Neumann (69).
The 36-hole cut fell at 1-under-par 143 and among the notable players to miss the final round were Pat Hurst (144), Laura Davies (144) and Grace Park (146).