Yang, who led by four shots at one stage during the third round, was at 11-under 205, one shot better than Ludivine Kreutz of France.
Kreutz made up eight shots over the final six holes with a 67, including a hole-in-one.
Another amateur, 19-year-old Tiffany Joh (69), was tied for third with fellow American Catherine Cartwright (70), two shots back at 9-under.
Yang, vying to become the first amateur to win a major women's golf tournament in Australia, made a few errors near the end of her round Saturday and admitted she'll be nervous Sunday playing in front of a big gallery.
'I will do my best,' she said.
After Yang's round Saturday, her coach Laurie Montague, who runs a nearby golf academy, said he challenged his teenage student to shoot for a top 10 finish and not settle for just making the cut.
'I've seen a lot of good players but I've never seen someone at 16 go into a four-round professional tournament, the biggest tournament in Australia, and play that well,' Montague said. 'Her record around here is great and she's been shooting low numbers.'
Kreutz aced the 170-yard, par-3 14th, although she had to watch a replay to witness her hole-in-one.
Unhappy with her stroke off the tee, Kreutz turned away in disgust and didn't see it go in the hole.
'I didn't like it, it was a bad shot,' Kreutz said of her 6-iron which bounced onto the green and ran 65 feet across and into the cup.
Defending champion Karrie Webb headed straight to the putting green with her coach Ian Triggs after a frustrating third round of 74 which left her at 3-under.
Ai Miyazato of Japan, who led the tournament last year for the first three rounds, had a 71 Saturday for 1-over 217 total.