Esapekka Lappi leads Sebastien Ogier by a tenth of a second in Sardinia
The Finn had lagged the eight-time world champion until the closing, wet seventh Monte Lerno stage on the gravel roads around Olbia.
Ogier, starting the fourth event of his part-time season, had been 16.3 seconds clear halfway through the day but then lost time in the afternoon.
"There was no need to push harder, one tenth is enough," said Lappi, who suffered a slow left rear puncture in the final stage.
Ogier said the tyre choice and set-up had been slightly off but there was everything to play for: "We are still where we wanted to be, in the fight for the win. The gap is very close and tomorrow we will push again."
Hyundai's Thierry Neuville (34) was in third place, 18.6 seconds off the pace, ahead of Toyota's championship leader Finland's Kalle Rovanpera (22).
The rally is the sixth round of the season. Saturday features eight stages, with an opening loop of four then repeated in the afternoon.