Smylie (15 under), a recipient of the Cameron Smith Scholarship five years ago, showed no signs of nerves playing alongside his mentor in front of a huge Sunday gallery at Royal Queensland.
The 22-year-old was clear at the turn thanks to four birdies through his first six holes.
Smith was three back after a two-stroke swing on the sixth and an errant second shot on the par-five ninth hole that left the former world No.2 in the mangroves needing relief.
He found the green with his fourth shot but left a five-metre putt for par short.
Cameron Smith is attempting to keep pace with fellow Queenslander Elvis Smylie in Brisbane. (Jono Searle/AAP PHOTOS)
Marc Leishman, playing in the last group with Queenslanders Smith and Smylie, was left shaking his head after a series of putts slipped by the hole to be 10 under with David Micheluzzi.
Smith is chasing a fourth Kirkwood Cup but first title in more than a year.
Smylie won the WA Open last month and would relish a return to the European tour, part of the prize that comes with the winner's cheque at the DP World Tour-sanctioned $2 million event.
There was plenty of movement below them in what has become a three-round event due to excessive rain.
Angel Ayora carded a seven-under 64 to finish nine under for the tournament, but Anthony Quayle was clubhouse leader after carding an eight-under round moved him to 11 under.
Jason Day, in his first Australian appearance in seven years, birdied his first and fifth holes to sit on the cusp of the top 10 at nine under with five holes to play.
Jason Day hits a tee shot in the final round as he attempts to chase down the leaders. (Jono Searle/AAP PHOTOS)
Defending champion Min Woo Lee carded a final-round 66, finishing at seven under after just surviving the cut on an inconsistent Saturday.
Lee, a hugely popular winner in Brisbane 12 months ago, revealed he had been hampered by a sore knee this week.
"To find something … is good stuff going into next week," Lee said as he looked ahead to the Australian Open, which starts on Thursday at the Kingston Heath and Victoria golf clubs.
"I couldn't bend down and I still don't have the confidence to bend down.
"That's a reason I was a little flat for the first few days.
"It was just a freak accident. I literally just turned in bed and something popped."
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