The 53-year-old Australian continued to turn back the clock by shooting 72 in Saturday's windy third round at the Royal Birkdale course and will attempt to win the event for a third time Sunday.
His total, 2-over 212, makes him the oldest player ever to lead a major tournament after 54 holes.
"Obviously, I'm enjoying myself at the toughest British Open I've ever played in," Norman said in a television interview. "I never expected the winds to be this brutal (and) I'm glad I (felt) nervous. My expectations for this tournament remain low."
The last time he held a 54-hole lead on the PGA Tour was at the 1996 Masters.
With overall scores of 4-over 214, defending champion Padraig Harrington (72) and second-round leader K.J. Choi (75) share second place. England's Simon Wakefield (70) is alone in fourth at 5-over 215.