The 50-year-old entered day three in a share of the lead and showed the sort of golf that has made him a five time Major winner as he opened up a five shot lead after ten holes.
Mickelson may have dropped to 115th on the Official World Golf Ranking but he can still produce his brilliant best on the biggest stage, with the latest two of his ten European Tour wins being the 2013 Open Championship and 2018 WGC-Mexico Championship.
"I think that because I feel or believe that I'm playing really well and I have an opportunity to contend for a Major Championship on Sunday and I'm having so much fun that it's easier to stay in the present and not get ahead of myself," he said.
"I felt I had a very clear picture on every shot and I've been swinging the club well and so I was executing. I just need to keep that picture a few more times.
"So even though it slipped a little bit today and I didn't stay as focused and as sharp on a few swings, it's significantly better than it's been for a long time. So I'm making a lot of progress and I'll continue to work on that and hopefully I'll be able to eliminate a couple of those loose swings tomorrow.
"Because I'm playing a lot better than the score is showing and I think if I can just stay sharp tomorrow, I'll post a score that better reflects how I'm actually playing."
Co overnight leader Oosthuizen three putted the first to hand Mickelson the solo lead but the three time Masters Tournament champion did not need any help in moving away from the field.
I'm playing a lot better than the score is showing and I think if I can just stay sharp tomorrow, I'll post a score that better reflects how I'm actually playing
He hit a remarkable second to 15 feet the par five second to make a two putt birdie and then spun his approach at the third to kick-in range out of a bunker.
An up-and-down from the sand saved par on the next but he was soon back on the birdie hunt, putting his second from the rough on the sixth to 16 feet and then making a two putt birdie on the next to lead by four.
He got up and down from the sand again at the ninth to stay four ahead at the turn but an approach to seven feet on the tenth had him in double figures with a five shot lead.
Oosthuizen had made a gain at the eighth courtesy of a tee shot to six feet and he secured another after laying up on the 11th to trim the gap to four.
The leader made a first bogey of the day after finding sand off the tee off the 12th, with Oosthuizen birdieing from ten feet for a two shot swing, and bigger changes were to come on the next.
Both men put their tee shots in the water and, with Oosthuizen doing well to salvage a bogey and Mickelson making a double after going back to the tee, the lead was one and Koepka was in a share for second.
He hit a tee shot to 12 feet on the fifth but gave the shot straight back when he missed a very short putt on the next.
The 31-year-old then got down in two from the front of the seventh but dropped another shot on the ninth before an approach to 12 feet on the tenth and a 20 foot putt on the 12th had him within one.
He shared the lead with a two putt birdie on the 16th but three putted from off the green at the last.
Oosthuizen three putted the 17th to fall back and Mickelson had one more treat for the crowd, getting up and down in spectacular style on the last to stay ahead.
Streelman carded a 70, while Bezuidenhout had four birdies and a four bogeys in a 72, a score matched by Grace who made five of each.
U.S. Open champion Bryson DeChambeau, the man he dethroned Gary Woodland and Chile's Joaquin Niemann were at two under, a shot clear of England's Paul Casey, Canadian Corey Conners and South Korean Sungjae Im.