At 12-under-par 132, the 27-year-old Swede has separated himself by a full three shots over Ian Woosnam and Henrik Bjornstad, who carded respective rounds of 66 and 68 over the K-Club to reach the 9-under mark.
Darren Clarke (68) is one shot further adrift at 8-under, while Michael Campbell (70) is in a group of three at minus-seven.
Lundberg is playing the European Tour full-time for the first time ever this season, having worked his way onto the circuit via the Challenge Tour.
Thus far, he has performed well. He has finished tied for fifth twice ' at the South African Open and the Deutsche Bank SAP Open ' and tied for seventh on one other occasion in the Singapore Masters.
He is hoping to improve those numbers this week.
This is the best position Ive been in, Lundberg commented following his round. I was in the final round at Singapore. Hopefully, I can shoot in the 60s in both rounds and then see what thats going to finish.
His finish Friday was nothing short of superb, as Lundberg birdied his final four holes of the day to end with 65.
Click here to see Mikael Lundberg's scorecard!
Should he hold on throughout the weekend, he would join fellow Swede Henrik Stenson as a first-time winner on the tour, as Stenson took the Benson and Hedges International Open earlier in the season.
Henrik and I are good friends and I played with him when he won at The Belfry, Lundberg said. I would obviously like to follow what he did.
Some others might have something else to say about that, however.
Woosnam, for one, would like nothing more than to collect his first win on tour since the Volvo PGA Championship of 97, and his 66 on Friday was one of his best rounds of the year, with six of his seven birdies coming over the front nine alone.
Likewise, Norways Bjornstad is seeking to top his best finish of the year, a fourth-place showing at the Argentina Open.
However, it appears that defending champion Lee Westwood will continue in his search for his first win of the year this week, as the big Englishman carded a 74 Friday to just make the cut on the number at 1-over-par. He enters the weekend 11 shots back.
Full-field scores from the Smurfit European Open