Bosio hit the turn sharing the lead at 10 under par with former world No.1 Jiyai Shin after halfway pacesetter Hyojin Yang's dream run came to a halt on Saturday.
After starting the day one shot behind Yang, 20-year-old Bosio collected three birdies on the front nine after earlier heavy rain softened the Kingston Heath greens nicely for the late starters.
A 2023 Karrie Webb Scholarship recipient, Bosio's stunning display comes after the Queenslander had to withdraw from the final round last year while on track for a top-10 finish.
Shin, the Open champion in 2013, also negotiated the front nine in two under to join Bosio in a tie of the lead.
Green was two shots back at eight under, alongside South Africa's two-time defending champion Ashleigh Buhai.
But 17-year-old Yang slumped with four dropped shots to tumble back to five under.
Dual major winner Minjee Lee was the big early mover in horrible conditions to start the day.
Minjee Lee defied terrible weather to make her move at the Australian Open. (Con Chronis/AAP PHOTOS)
The former world No.2 defied driving rain to carve out a superb bogey-free four-under-par 69 to storm into the top 10.
"I feel like I really played very poorly the last two days and today obviously the weather was not as good, but I posted a better score," Lee said.
After only arriving on Wednesday from the US and not playing Kingston Heath after the course was closed, Lee is finally starting to adjust.
"Having gone around once now, I'm a little more comfortable around the course," she said.
"To be honest, I didn't really remember too many of the finishing holes until I played them yesterday.
"So, no, it was nice today. Obviously, a little bit tougher conditions with the rain, but I'm happy I posted a nice score."
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