The 16-year-old Thompson, the youngest LPGA Tour winner, is 10-under for the tournament, one shot ahead of Sophie Gustafson (69), of Sweden.
Thompson, who led by two shots going into the third round, bogeyed the 15th. Gustafson made three birdies on the back nine.
But Thompson reclaimed the lead when she reached the green in two on the 18th and made the birdie putt.
“I was pretty much like ‘let’s just hit it,’ ” Thompson said. “You’ve been hitting it pretty good, so just got to be confident.”
Lee-Anne Pace, of South Africa (67), and Pernilla Lindberg, of Sweden (68), are two shots back of Thompson in the season-ending Ladies European Tour tournament.
Michelle Wie (71) is five shots off the pace at 5-under.
PGA TOUR AUSTRALASIA: In Melbourne, Australia, England’s Ian Poulter overcame a bout of food poisoning to birdie the final two holes for 3-under-par 68 and a two-stroke lead after the second round of the Australian Masters .
Poulter, who woke up feeling ill Friday after taking a one-shot lead in the first round, had a 9-under 133 total at Victoria Golf Club.
Matthew Giles was in second after 68, while fellow Australian Ashley Hall was another shot back in third after 70.
Top-ranked Luke Donald, of England, was at 3-under after 70, while defending champion Stuart Appleby was forced to withdraw due to a lingering back injury.
Greg Chalmers, also 3- under after 70, is trying to become the second player to complete the Australian Triple Crown after sweeping the Australian Open and Australian PGA last month. Robert Allenby accomplished the feat in 2005.
ASIAN TOUR: In Bangkok, Lee Westwood shot 8-under-par 64 to take a commanding 11-stroke lead at the halfway mark of the Thailand Golf Championship.
The Englishman had eight birdies in his second consecutive bogey-free round at Amata Spring Country Club to reach 20-under overall. Westwood shot 60 on Thursday.
Westwood had 10 birdies and an eagle in the first round Thursday.
Masters Tournament champion Charl Schwartzel, of South Africa, had 66 and was tied for second at 9-under with Michael Thompson, who also shot 66.
John Daly followed his opening-round 65 with 73 to slip to fourth at 6-under, 14 shots behind Westwood.