The 17-year-old fired a one-under 71 today that saw her slide to a share of fifth place at six-under and she is four strokes back from leader Brittany Lincicome (-10).
Big names Inbee Park and Suzann Pettersen are in a share of second at nine-under, while Mirim Lee holds outright fourth at seven-under.
Ko's day began poorly at the Monroe Golf Club in New York as she made three bogeys and a birdie through her first 10 holes but she finished well with four birdies and a bogey during her last eight.
While she is four back from Lincicome, Ko has the ability to shoot a low round to make a run on the final day. It's something she has been hinting at throughout the tournament but too many bogeys have proved costly this week.
If Ko was to win the LPGA Championship, she would become the youngest major winner and would also climb to No 1 in the world rankings.
- Daniel Richardson of APNZ