Casey's nine birdies along with an eagle on the par-5 15th got him to 19-under for the tournament and good enough for a two-stroke advantage over Germany's own Alex Cejka and Australia's Stephen Leaney.
It was Casey's second straight day of carding nine birdies, but the difference today was just one bogey as opposed to four on Friday. After 54 holes, the 25-year-old Casey has birdied or eagled 26 of the holes he's played.
'I wasn't really aware of a really low round until the 14th,' said Casey. 'Until then I was just chasing the guys on the leaderboard. I knew Alex (Cejka) was shooting a low score and that was my focus.'
Cejka was to 3-under through 12 before a four-hole stretch that saw him go birdie-eagle-birdie-eagle that got him to the top of the leaderboard.
His 8-under 63 tied the course record before Casey bettered it by one shortly thereafter.
'I didn't even know I was that good a player,' said Cejka, one of the local favorites. 'I'll be giving it everything I have got tomorrow because I definitely want to win this title.'
Leaney, the first round leader, continued his flawless play by starting the day with birdies on his first three holes and five of the opening seven.
The Australian reached the 18th hole, his 54th of the tournament, without making a single bogey. But a drive into the left rough cost him his bogey-less streak and left him two shots back of Casey at 17-under.
'Two shots off the lead is okay,' said Leaney, who tied for sixth at last week's European Masters. 'I can't complain and there is not much you can do about a 62.'
Second-round leader Ian Woosnam and British Open sensation Gary Evans are also still very much in the hunt, only three back at 16-under.
Woosnam, coming off a 64 on Friday, followed up with a 4-under 68, though a bogey at the 16th cost him the chance of being in the final pairing on Sunday.
Evans, whose spirited Sunday rally at the Open gained him notoriety, had another great rally on Saturday. Starting at the 11th, he strung together five consecutive birdies to reach 17-under.
Four-time tournament champion and the event's co-host, Bernhard Langer, is tied for 11th at 12-under, after a 6-under 66.
Also at 12-under is Retief Goosen following a 3-under-par 69 that has him 8 shots off the lead.
Full-field scores from Linde German Masters