The Hall of Famers shot matching 9-under 63s in sunny and breezy conditions at Desert Ridge. Park reached 14 under to take a one-stroke lead over Mariajo Uribe into the final round. The 54-year-old Davies was tied for fourth at 11 under in the event honoring the 13 women who founded the LPGA Tour in 1950.
Park played the first five holes in 6 under , holing out from 90 yards for eagle on the par-4 third. She birdied the par-4 ninth for a front-nine 31, made another birdie on the par-5 11th and capped the bogey-free round with an 18-foot birdie putt on the par-4 18th.
''The front nine, everything felt great,'' Park said. ''Still, the back nine, I felt like I was hitting the ball pretty solid, but just the putts didn't seem to drop like front nine. If it dropped like front nine, it would've been 59.''
In 2013, she won the first three majors and finished with six victories. The 29-year-old South Korean star took a break from the tour in August after the Women's British Open, only returning two weeks ago for her title defense in Singapore.
''I think I just love the breaks,'' Park said. ''Just really refreshes me. Obviously, I get nervous because I haven't played tournament golf for a while. ... I'm not burned out. I'm happy to play golf again.''
The 18-time tour winner has seven major titles and won the gold medal at the Rio Olympics.
Davies had her best round on tour since 2005 . She's trying to win for the fifth time in Phoenix after taking the Standard Register PING at Moon Valley four straight years from 1994-97.
''I'll certainly have a crack at it,'' Davies said. ''At least I've given myself a chance now.''
She birdied five of the final six holes on the front nine, made a 6-foot eagle putt on 11 and birdied 15 and 17 in the bogey-free round.
''Just solid golf,'' Davies said. ''Hit it close enough and hole some really good putts. On greens as beautiful as this, you have to be making your putts, and that's what happened today.''
Davies is fighting Achilles tendon and calf problems in her left leg.
''I can swing as hard as I want with no feeling at all, but every step is just misery,'' Davies said.
She won't let the injury keep her out of the final round.
''I'll crawl around if I have to,'' Davies said.
Uribe birdied the 18th for a 67. Winless on the LPGA Tour, the 28-year-old Colombian won the 2007 U.S. Women's Amateur.
''I'm just thinking of putting good rolls on my putts,'' Uribe said. ''That's all that matters on this golf course.''
Ariya Jutanugarn was two strokes back at 12 under after her third 68.
Chella Choi had a 66 to join Davies at 11 under.
Tiffany Joh aced the fourth hole in a 64 that left her 10 under with Brittany Lincicome (68) and Marina Alex (70). Joh used a 5-iron on the 166-yard hole, a day after shanking a 7-iron and scrambling for par.
''This is like the worst holiday to be making a hole-in-one on,'' Joh said about St. Patrick's Day. ''You'll go broke buying everyone green beers.''
Jessica Korda had a 71 to get to 8 under. She won three weeks ago in Thailand in her return from surgery to correct a severe overbite. Second-round leader Cydney Clanton had five bogeys in a 74 that left her tied for 23rd at 7 under. Singapore winner Michelle Wie also was 7 under after a 71.