Ko shot 8-under-par 64, following up her 65 in the opening round, to take the lead through the morning wave in the second round of the Indy Women in Tech Championship.
Thompson, however, answered in the afternoon. She followed up a 63 with a 66 to tie Ko for the lead at 15-under overall at Brickyard Crossing Golf Club in Indianapolis.
That sets up a showdown between two of the greatest teen phenoms in LPGA history.
Thompson, who turned 22 in February, and Ko, who turned 20 in April, will go off together in Saturday’s final round.
“I've played with Lydia quite a bit,” Thompson said. “We're usually paired with each other at least one round a week. She's super nice, a great player, obviously, very talented. So, tomorrow, I'm just going to focus on my game and see where that takes me.”
Thompson won her first LPGA title when she was 16 at the Navistar Classic, becoming the tour’s youngest winner at the time. Ko came along a year later to win the Canadian Women’s Open at 15.
Thompson is looking for her ninth LPGA title, her second this season.
Ko is looking for her 15th LPGA title, her first in more than a year. She entered this week having missed the cut in two of her last three starts, and having failed to put up a top-10 finish all summer, over her last seven starts.
“It was actually more frustrating, because I felt like there were a lot of positives, and a lot of good things going on, but I just couldn't put it all together,” Ko said. “This week, the last couple days, I've been able to hit it pretty good, and make some good putts. That's what I've kind of been lacking the last few months.”
Ko made five consecutive birdies on her second nine Friday. Though she entered this week just 47th on tour in greens in regulation - a big slip from two years ago, when she ranked second - her iron play has been sharp through two rounds. She has hit 33 of 36 greens this week.
This season started with Ko facing some challenges that were more daunting than she expected. She came into the year with a new coach, new equipment and new caddie.
Going through swing changes and dialing in yardages with 14 new PXG clubs in her bag required Ko to be more analytical about her game than is natural to her.
She was asked Friday if she finds herself thinking too much about her swing.
“I've tried to keep putting my time in on the range, to make me think less while I am playing,” Ko said. “Sometimes, those thoughts do come, but I think it's something where you have to have an on-and-off switch. If you don't hit a good shot, and you start thinking, `Hey, what's going on?’ And switch off, and just let it swing freely. I think that's really important. It's just nice to kind of be able to get into that rhythm.”
Thompson is overpowering Brickyard Crossing, which is playing to 6,599 yards on the scorecard. She averaged 300 yards per drive on Friday, which is a staggering 76 more than Ko.
Through two rounds, Thompson has made 17 birdies.
“It's not the longest golf course,” Thompson said. “I can reach the par 5s, which I think is definitely in my advantage, but you still have to hit golf shots.”
Thompson and Ko, of course, aren’t the only players with chances Saturday. Candie Kung (64) is just one shot back with Ashleigh Buhai (66) four back.
“I'm really just going to try not to even look at a leaderboard,” Thompson said. “I'm just going to try to focus on my game. It's going to take a lot of birdies, especially if it's perfect weather like it was today.”