Tiger Woods started the day with a four-stroke advantage, but double bogeyed the first hole and bogeyed the last for a 1-under 71.
The worlds No. 1 finished three rounds in Grand Blanc, Mich., at 15-under-par 201, one shot clear of Esteban Toledo (67).
The former boxing professional was 7-under over his first 13 holes Saturday ' and led Woods by three shots ' before stumbling home with bogeys on 15 and 17.
'I've told a lot of people that I will quit this game if I win (on the PGA Tour),' said Toledo, who won the 2000 Mexican Open. 'My wife doesn't agree with that because I have to feed the family.'
Fred Funk (67) and Bob Tway (68) are the next nearest competitors, three back at 12-under.
Woods has won 24 of 26 PGA Tour events in which he had led or been tied for the lead after 54 holes.
This is Tiger's first event since his seasonal Grand Slam chances ended at the British Open. He entered the third round having not dropped a shot in 51 holes, dating back to the final round in Muirfield.
That streak ended abruptly Saturday.
After driving his ball into the fairway at the first, Woods went for the green in two, 296 yards from the pin. His ball failed to cut, however, and viciously kicked left and out of bounds. Tiger took a penalty drop from his original position and played his fourth shot into the greenside bunker, from where he blasted out to 12 feet and missed the bogey putt.
'I just had to hit a big high slice, had to start the ball pretty far left,' said Woods, referring to his second shot. 'I had 260 to the front and I didn't slice it. I cut it. I absolutely killed it.'
Tiger regrouped with an 18-footer for birdie at the second, and then saved par from 12 feet at the fourth.
By then, though, Toledo had caught him. The world's 218th-ranked player birdied four of his first six holes to tie the Woods at 13-under.
Tiger tried to trade punches with Toledo over the next couple of holes. Toledo, playing two groups in front of the overnight leader, birdied the ninth to make the turn in 31. Woods matched him with a birdie at the sixth.
Toledo again moved one clear with a 12-footer at 10, but this time Tiger couldnt do the same at the seventh. The 39-year-old Mexican just missed a third consecutive birdie when his bunker shot on the par-3 11th stopped on the lip of the hole.
His lead still increased, however, as Woods bogeyed the ninth to fall to minus 13. After hitting his approach shot into the down-slope of the right greenside bunker, Tiger was barely able to advance his ball out of the hazard.
Toledo moved three clear by sinking a 10-footer for birdie at the 13th, but thats when his round peaked, and started downhill.
First, Woods pitched an approach to three feet at the par-4 12th to cut his deficit to two.
Toledo then found trouble at the par-4 15th. He pushed his drive behind a group of trees in the right rough and decided to play his second shot down the fairway of the adjacent sixth hole.
His third shot, from just over 80 yards, came up well short of the pin. His bogey, coupled with a Woods birdie at the par-5 13th, left the pair tied for the lead at 15-under.
After missing a two-foot birdie putt at the par-5 16th, Toledo flew the green with his tee shot on the par-3 17th and failed to get up and down from the bunker. He dropped to 14-under, and fell two back as Tiger two-putted 16 for birdie.
Woods gave that shot back, though, by lipping out a five-foot par putt at 18.
'I didn't really have the stuff I had the last couple days,' Woods said. 'Didn't quite feel as comfortable over the shots, but I got it to under par for the day, that's something I am proud of.'
Full-field scores from the Buick Open