Appleby was second alone heading to Saturday’s third round at the Montreux Golf and Country Club in Reno but fell well off the pace after a bogey at the third.
The dropped shot saw one point deducted from his score under the modified stableford scoring format, enough to drop him more than 20 places down the leaderboard.
But the 20-year veteran turned things around with a birdie at the eighth to get back into positive figures then came alive on the back with four birdies to finish the day in a share of second position.
The modified scoring awards eight points for an albatross, five for an eagle, two for a birdie, no points for a par and deducts one for a bogey and three for a double bogey or worse.
Appleby finished the day with eight points and just five behind 54-hole leader Greg Owen whose final hole Saturday was a perfect illustration of the volatile nature of the scoring system.
Cruising on 17 points for the day and eight points ahead of his closest challenger, Owen hooked his tee shot at the par-5 last into an unplayable lie.
After dropping in the native grassed area, he chopped out to the fairway then mis-hit his fourth into water short of the green.
Unable to hole his 50 metre shot for a bogey following the penalty drop, he gave back three points to the field and will begin the final round just five ahead of Appleby and American Derek Fathauer.
Appleby’s last Tour victory came in 2010 in extraordinary circumstances when he fired an 11-under 59 in the final round of the Greenbrier Classic to beat Jeff Overton by a shot.
Back surgery in 2015 has seen the now 46-year-old struggle for form in both 2016 and again this season but he produced some vintage play in Saturday’s third round.
Employing a bizarre left hand low, right hand claw grip on his putter Appleby holed out beautifully from mid and short range to keep himself in the tournament ahead of what promises to be a thrilling final round.
Defending champion Greg Chalmers is next best of the Australian contingent with 21 points to be in a share of 32st position while another former winner, Geoff Ogilvy, is on 19 points and T42.
Brett Drewitt and Matt Jones are both on 16 points and T55, Peter Lonard one point further back and T60.
Aaron Baddeley is T64 on 12 points while rookie Curtis Luck endured a horror third day to give back five points and be last in the field with just five points.
Tee times have been moved up for Sunday’s final round with bad weather predicted, players to be grouped in threes and playing off both tees.