Warren's fine display of links golf took the East Kilbride player to eight under in the 87th edition of the historic event at a windy Parador de El Saler, two clear of fellow Scot Craig Lee, and a further shot clear of the Englishmen David Horsey and Paul Waring.
"I'm very pleased with today's work," Warren said. "In wind I like the fact that you have to have so many different shots. On this course even in calm conditions you'd have to do that because of the shape of the holes and the way the greens are set, being so firm.
"You can't just use the standard shot. There's always something to the shot whether it be higher or lower, fade or draw. I managed to do that well today and hopefully it continues tomorrow."
American Peter Uihlein had led going into the weekend, but carded a 74 as the 32-year-old Scot swept past him, courtesy of six birdies and just two dropped shots in an impressive round.
It was Warren's excellent short game that allowed him to move clear, scrambling several times to make par and with it give himself an excellent chance to add to his previous two European Tour victories – the last of which came at the 2007 Johnnie Walker Championship at Gleneagles.
"Concentration is going to be fundamental tomorrow. I know how to win, and that will work in my favour," he added
Lee, meanwhile, who began two shots shy of Uihlein, made pairs of consecutive birdies from the fourth and again from the 14th to briefly move into the lead before back-to-back bogeys on 16 and 17 dropped the Stirling player back to six under.
He said: "I played well early on and managed to get a couple of birdies, but the end was difficult with the wind and I threw a couple [of shots] away.
"There were a couple of easy up and downs and I did not quite make the most of them. But I am delighted with the position that I am in; the game is pretty good and pretty steady."
A shot behind Lee, Horsey shot a best-of-the-day 66, fully taking advantage of the more benign weather earlier in the day in Valencia. The Cheshire man made eight birdies, recovering superbly from two early bogeys.
His compatriot Waring is also well-placed after a fine three-under-par 69. However, halfway leader Uihlein, a former US Amateur Champion, did not fare so well.
Having made two birdies in his first three holes, he then dropped four shots, which saw him slip back into a tie for fifth alongside Germany's Max Kieffer, England's David Howell, and France's Raphael Jacquelin – all of whom will start the final round four shots back from leader Warren.