McIlroy briefly snatched the clubhouse lead with a birdie-filled third-round four-under-par 66 to continue his remarkable comeback after languishing in a tie for 105th on Thursday.
McIlroy declared himself "right back in it" after climbing to a share of 30th at one over on Friday.
Then, after starting his third round five shots back of Americans Maverick McNealy and Alex Smalley, he reeled in the halfway co-leaders with six birdies in his first 13 holes.
Bidding to become the first player since Jordan Spieth in 2015 to win the season's first two majors, the Northern Irishman had to drain a clutch 12-foot putt to keep the lead on the beastly 551-yard 15th hole, the longest par-4 in major championship history.
McIlroy then dropped a shot with a sloppy bogey on the par-3 17th but still only found himself three shots behind the frontrunning Smalley at day's end.
"I feel like I still did enough to think I have a chance going into tomorrow," golf's seventh grand slam winner, and already-two-time PGA Championship winner, said.
Who would count him out?
After defending his Masters jacket last month, the 37-year-old is now trying to join Ben Hogan (1953), Arnold Palmer (1960), Jack Nicklaus (1972), Tiger Woods (2002) and Spieth (2015) as the only golfers to win the first two majors of the year in the modern rotation.
"I've climbed my way out of that hole a little bit, which I'm proud of myself for doing that," McIlroy said.
"But there's one more day left and I feel like I feel like I've still got a good chance."
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