Foster, who shared the second-round lead with Robert-Jan Derksen, posted a 3-under 69 to complete 54 holes at 10-under-par 206.
Gregory Bourdy took advantage of moving day as he fired a 7-under 65 to jump from a share of 25th into a tie for second.
He shares second place at 8-under-par 208 with Ian Poulter (70), Lee Westwood (70), Fredrik Andersson Hed (68), Martin Erlandsson (70) and Niclas Fasth (67).
Foster opened with a birdie on the second and made it two in a row with a two-putt birdie on the par-5 third. A birdie at the fifth moved Foster to 10 under, where he stood two strokes clear of the field.
The Englishman however, stumbled to a bogey on the eighth at The Belfry. He parred five in a row from there and was just one up on Bourdy and Fasth, who were both in the clubhouse.
Foster drained an 18-footer for birdie on the par-3 14th and came right back with a birdie on 15 that moved him three clear of the second-place logjam.
The 32 year old got up and down for birdie from a greenside bunker at the par-5 17th. However, Foster stumbled to a double-bogey on the last. That dropped his overnight lead to two.
'The second shot in was disappointing and I take full responsibility,' he said. 'It was a 3-iron shot and I decided to hit a little wood from a tight lie and found the water. With hindsight, I'd have gone with the 3-iron, but there we go.'
Foster leads after 54 holes for the first time in his tour career. He will go for his second tour win on Sunday. His first came when he won a six-man playoff at the 2003 dunhill championship in South Africa.
'It would be great to win, but it's a long way from my mind at the moment,' said Foster. 'I'll take the positives from today and look forward to coming out here tomorrow.'
Bourdy flew up the leaderboard with a bogey-free round that included five birdies and an eagle on the par-5 17th.
Fasth moved into share of second with a round of 67 that included a double-bogey on the par-4 eighth and seven birdies, including three in a row to end his round.
Francesco Molinari used a 3-under 69 to move into eighth place at 7-under-par 209. Miguel Angel Jimenez and eight-time Order of Merit champion Colin Montgomerie are one stroke further back at minus-6.
Derksen fell from a share of the lead into a tie for 11th at minus-5 after a 2-over 74 in round three.