Australia's top-ranked player Cameron Smith failed to fire as the 50-year-old Mickelson wound back the clock with some thrilling golf over the front nine of Kiawah Island's Ocean Course.

A five-time major winner who last won the PGA Championship in 2005, Mickelson is aiming to become the oldest player to win a major – Julius Boros won the 1968 PGA Championship at the age of 48.

Mickelson birdied five of his opening 10 holes to get to 10-under and was four shots clear of the chasing pack when he made the turn.

Just as he looked near unbeatable and with his lead out to five shots at the 10th, he dropped three shots in two holes with a bogey at the 12th and a double bogey at the par-four 13th to give the chasers new life.

Cam Smith is the best placed of the Aussies but will need something special on Sunday. PHOTO: Sam Greenwood/Getty Images.

Mickelson parred his way home for two-under 70 to sit at 7-under 209.

He leads by one over four-time major winner Brooks Koepka (70), who relinquished a share of top spot with a final hole bogey.

Koepka has won two of the past three PGA Championships and now chases history of his own as he vies to be the sixth player with three or more Wanamaker trophies, joining Walter Hagan and Jack Nicklaus (five each), Tiger Woods (four), Gene Sarazen and Sam Snead (three each).

South African Louis Oosthuizen (72), the 2010 British Open champion, is third at 5-under.

Smith began the third round six shots off the lead as the leading Australian but was still confident he could make a run.

A two-over front nine put paid to any real hopes and the mullet-toting Queenslander carded a 73 to be two-over for the week, a distant nine shots adrift of Mickelson.

"I just didn't drive it well enough to make a run at it," Smith said.

"I feel like I'm so close to getting the best of this place but if you're a fraction off it will bite you."

The rest of the Australians are well back.

Jason Scrivener shot an even-par 72 to be 4-over while former World No.1 Jason Day also had a 72 but at five-over will need a miracle on Sunday to get inside the top-17 of the tournament, the mark needed to have a chance to qualify directly for the US Open.

"That's the last thing on my mind tomorrow. I just need to keep building confidence in my game, especially my putting," the 2015 PGA Championship winner Day told AAP.

"There will be plenty of US Opens to play if I get fixed for the long term."

Matt Jones carded a 74 to be 6-over, Cameron Davis a 76 to be 7-over while a 77 from Lucas Herbert left him languishing at 9-over.

- Ben Everill