Scott Gibson carded his second straight 4-under 68 to move into second place at minus-15. Eugene Smith is one stroke further back at 14-under-par 202 after a 67.
Wil Collins and Stephen Gangluff also posted 66s to share fourth place at minus-13. They were joined there by Anthony Rodriguez, who shot a 69 in round three.
Darren Griff, who led after two rounds, struggled to a 1-over 73 and is alone in seventh at 12-under-par 204.
Steele got off to a quick start with birdies on one and two to move to 14 under and a share of the lead with Griff. Steele tripped to a bogey on three, but the lead was his as Griff double bogeyed the same hole.
The 23-year-old Steele got back to minus-14 with a birdie on the par-5 fifth. He remained hot with birdies on each of the next four holes at Glendale Golf & Country Club to turn in 6-under 30.
Steele was 18-under as he made the turn, but slipped back to minus-17 with a bogey at the par-5 14th. Steele quickly recovered that stroke with a birdie on 16 to lead by three after three rounds.
'I was trying to keep them away,' said Steele. 'I just had one of those days where the cup seemed bigger. I caught a few breaks today.'
Gibson made four birdies over his opening nine holes to get to 15 under. He posted two bogeys and two birdies on the back nine to remain there.
'I'll take it, but that's about it,' Gibson said. 'I didn't hit the shots I wanted to.'
Mike Belbin matched the course and tournament record of 9-under 63 Saturday. That was good enough to move him into a tie for eighth at 10-under-par 206. He was joined there by Tom Stankowski. Daniel DeLeon is alone in 10th at minus-9 after a 2-under 70 in round three.