Defending champion Tiger Woods shot a two under 69 to lie eight shots adrift of Garcia, whose closest challenger is now Steve Stricker.
The American shot a 64 at Carnoustie to equal the course record and sit in the clubhouse on six under.
Garcia shot a bogey-free round, going out in 34 thanks to birdies on holes one and eight and picking up another birdie on 11.
"It's great. I had some really good birdie chances coming in but I'm not going to be greedy," said Garcia. "It was a good solid round."
Korean KJ Choi bogeyed the difficult 18 to card a 72 and remain in touch in third place on three under with six other players after a day of relatively low scoring.
Chris DiMarco is one of those on three under after a round of 66 and was joined by Irish duo Padraig Harrington and Paul McGinley, England's Paul Broadhurst, Ernie Els of South Africa and American Stewart Cink.
Fiji's Vijay Singh kept his hopes of winning a fourth Major alive after a 68 moved him up to two under.
Meanwhile Woods, who is attempting to become the first player since Australian Peter Thompson (1954 - 1956) to win the world's oldest tournament three times in a row, now faces an uphill battle after a round that included four birdies and two bogeys.
"I've got to play a little better than I have been, that's for sure," Woods said. "But at least I give myself a chance going out there tomorrow."
The winner of the 136th British Open will pocket 1,11 million euros (1,52 million dollars) of the total purse of 6,24 million euros. dpa
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