Higginbottom, who became the first amateur in 50 years to win the New Zealand Open in 2012, recovered from the setback and clawed level with Jeffress by going birdie-eagle at the par four 16th and par five 17th to sign for a one-under-par 71 and eight-under total.
"I kept fighting, it was pretty brutal out there. It was nice to finish well and still be in the lead at the end of the day," Higginbottom said.
"This is what we play golf for. Obviously we want to be in contention going into the final round."
Jeffress fired five birdies in his round of 69 with another Australian, Andrew Dodt (71), two shots back in third.
Three-times major winner and Natadola Bay Championship Golf Course designer Vijay Singh (70) fired his best round of the week to give the home fans something to cheer about as he moved up into a tie for 15th, nine off the lead.
(Writing by Patrick Johnston; editing by Sudipto Ganguly)
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