McArthur stayed cool under pressure to go four under after Sam Hutsby and Alvaro Velasco carded 65s to go second and third respectively.
Englishman Johnston's 10-under-par round at the Penati Golf Resort was spectacular but the Scottish second-round leader was still in pole position for a first Challenge Tour title since 2008.
After his first bogey of the week at the par-4 ninth, five birdies moved McArthur to 17 under for the tournament.
"I played very well but it feels as though I didn't hole any putts," he said. "I think my longest birdie putt was three feet so I took advantage of most of the par-5s.
"I'm delighted to still be in the lead but I almost feel like if I'd had two or three more birdies, it would have taken a lot of the guys out of the reckoning and as it is now, it's jam-packed at the top.
"I'm going to have to shoot a really low round tomorrow because it's that kind of course. It's there for the taking."
McArthur's last Challenge tour win was six years ago but he feels if he can stay in front down the stretch, he can get a second title.
"If I make a few birdies on the front nine I'll be able to see where I'm at with nine to go and start thinking about it," he said.
Hutsby had a fine start to his third round, a birdie on the first and an eagle on the second helping him to his lowest score of the week and second place on 16 under.
The former Walker Cup player was a shot clear of playing partner and 2010 Challenge Tour No.1 Velasco.
Johnston, winner of the Scottish Hydro Challenge at Aviemore two weeks ago, moved from just inside the cut line after round two to equal fifth on 13 under.
"I was getting fairly excited at one point," he said. "After a four-under front nine … I told myself to just take advantage of the par 5s coming in and see what happens. I made a good birdie at the 10th, had an eagle on 11 then birdied 12 and was thinking: 'This could really be good now'."