Oh shot an eight-under-par 64 on the soggy Royal Pines course hit by more than 16 inches of rain in the past week, while Ariya had a 65. They had two-round totals of 10-under 134 and a one-stroke lead heading into the final round Sunday of the European Ladies Tour's opening event of the season.
Australian Stacey Keating, who shot 67, and last year's Australian Open winner American Jessica Korda (68) were tied for third.
Seven-time Australian Masters champion Karrie Webb (66) and South Korea's Chella Choi (67) were tied for fifth, another stroke back.
Oh eagled the par-5 18th hole, hitting driver and then 3-wood from 190 yards to 15 feet and making the putt.
"I really wanted to hole that because I missed my opportunity on the 15th (where she missed a similar putt and had to settle for birdie) and I really want to get it on the 18th where everybody was so I could fist-pump," she said, laughing. "An eagle at the last, it was just a beautiful way to top off a beautiful round of golf."
Ariya said the course was proving tough for her, despite her good score, because she didn't have a chance to play a practice round.
"This is just my second round, anybody has a chance to win," she said. "Today my putting helped me a lot, but I still missed some from 3 feet."