Ryu, 26, whose 16-under-par 126 is also a 36-hole record at the tournament, is bidding for her second LPGA title this year and fourth of her career.
The South Korean claimed an impressive bogey-free round with 10 birdies.
She has a comfortable five-shot lead over Thailand's Moriya Jutanugarn and American Stacy Lewis.
Britain's Mel Reid, who put herself within two shots of the lead after the first round, fell away with a four-over-par 75 and is 14 shots behind Ryu.
"It was so much fun," Ryu said after her round.
"At the back nine, I was able to make some short birdies, and then pretty much made all of them. So happy with my round today."
Ryu So-yeon carded a tournament-record 10-under-par 61 to take a five-stroke lead heading into the final round of the NW Arkansas Championship.