Partnered for the third round at the Old Course, the duo began the day tied and could not be separated after 18 holes of spectacular golf, ending the day sharing a four-stroke advantage at the summit.
Their six-under 66 score saw them leapfrog and race clear of Cameron Young and day two leader Cameron Smith, who carded 71 and 73 respectively to head into Sunday tied at 12-under par.
Hovland lit the touchpaper for a classic Open duel at the third hole, igniting a run of four consecutive birdies. It set the tone for a clinic of putting skill from the Norwegian who, having bogeyed twice in each of his opening two rounds, would later sign an unblemished scorecard.
In only his second Open outing and his first in the major at St. Andrews, the 24-year-old looked unflappable in the midst of raucous crowd support for his Northern Irish playing partner, smiling his way around the Old Course.
"I don't mind [the support for McIlroy], it doesn't take the pressure off of anything," Hovland told reporters.
"There were still some shouts there for me as well, so I appreciate those. At the end of the day, I've just got to play my game and not worry about anything else."
With Hovland chasing his first major, McIlroy kept pace with his younger rival courtesy of the type of brilliance that has seen the 33-year-old lift four major trophies, including the Claret Jug in 2014.
Three birdies in five to close the front nine moved him a shot behind, before a remarkable eagle from the bunker at the 10th hole drove him into the lead.
Despite ending up in the sand, the Northern Irishman looked good for another birdie following a booming tee drive, only to then rock the nearby grandstands with a stunning, 27-yard chip into the cup.
As McIlroy raised his arms to take in the appreciation of the crowd, even Hovland offered a congratulatory fist-bump to his competitor.
"Rory is a good guy, so I don't mind saying good shot to him," he said.
"Disregarding the situation you're in, that's just a filthy bunker shot, so you just have to go, 'hey, that was a sick shot.' It's just part of the game."