Two ahead at halfway in the opening Major of the season, the 21 year old Northern Irishman was caught when Australian Jason Day - his playing partner for the third day running - birdied the second and third.
Back came McIlroy with a six foot birdie putt on the 240 yard next, but while he had only his second bogey of the week after driving into sand on the next, Day sank a 30 footer up and over a huge ridge.
That made the 23 year old, trying to become the first Australian ever to take the title and the first debutant since Fuzzy Zoeller, outright leader for the first time.
But he three-putted the next, then miscued his approach to the 450 yard seventh for another bogey.
Both failed to birdie the long eighth, then McIlroy missed a second successive 12 foot attempt to turn in a level par 36 to Day's 35.
And when Europe's rising star bogeyed again from the fringe of the tenth green he was back to nine under and alongside not only Day, but also Korean K J Choi.
Tiger Woods, though, managed only a front nine 37 after bogeys at the first and fourth and a lone birdie courtesy of a 15 foot putt at the first.
When he three-putted the 11th, missing from under three feet, he had slipped back from third to ninth on five under, while defending champion Phil Mickelson's 71 for three under kept him deep in pack on three under and joint-20th.
Choi also bogeyed the 11th as the error count from all the main contenders continued, leaving McIlroy and Day out in front again.
Also ahead of Woods were former winner Angel Cabrera on eight under with three holes to play and Australian Adam Scott (67), South African Charl Schwartzel and England's Luke Donald on seven under.
Donald turned in 33 with birdies at the second, eighth and ninth, took six on the long 13th after hitting a shocking third onto the bank of Rae's Creek, but came back with an eight footer on the next.
On the 54th birthday of Seve Ballesteros. compatriot Sergio Garcia made it all the way into a tie for third, but his golfing comeback has still a long way to go - he bogeyed the tenth, 12th and 14th and double-bogeyed the 11th to go all the way back to two under.
Last year's runner-up Lee Westwood resumed in a tie for seventh on five under, but he mixed three birdies with four bogeys over the first 13 holes and was joint-12th with fellow Englishman Ross Fisher and Scottish debutant Martin Laird (69).
The two stroke swing on the fifth was reversed at the long 13th. McIlroy two-putted for birdie and returned to ten under, but Day went long and left and by taking a bogey six dropped into a tie for second on eight under with Cabrera - in with a 67 - Choi and Schwartzel.
Woods also two-putted the 13th to be joint eighth on six under, while Donald was seven under with one to go, Fisher round in 71 for five under and Westwood one further back after 16.
Day came back with a birdie at the 530 yard 15th - for the second day in a row he was close to going in the water - but McIlroy was safely on in two again and with a matching four stayed two in front.
Moments before Woods could have closed his deficit, but after a marvellous hooked second round the trees he three-putted for par and remained four back in eighth.
By then Schwartzel had joined Cabrera in the clubhouse in third spot on eight under and Choi was alongside them with two to go.