The 20-year-old Thai, who reeled off three LPGA Tour wins in a row in May, fired six birdies in a faultless 66 to finish on 16-under-par 200 in the fourth and penultimate major of the season at Woburn.
South Korean Lee Mi-rim (69), who led after the opening two days, was in second place on 202, three ahead of American Mo Martin (69).
Catriona Matthew was flying the flag for Britain on 206 after carding a 71.
Jutanugarn took the tournament by the scruff of the neck by birdying the second, third, fifth and eighth holes before making further inroads on par at the 10th and 14th.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Asked about her unusual pre-shot routine, she told reporters: "I really want to try to feel relaxed and I feel like whatever is going to make me happy is to smile".
Jutanugarn seemed set to bag the first major win of her career in April when she led late on at the ANA Inspiration but three closing bogeys ruined her chances in California.
NO DRIVER
The Thai, who has not used her driver all week at the relatively short 6,448-yard Marquess Course at Woburn, said she was now aware of how to play under pressure.
"The only thing I have to do is focus on what is under my control," said Jutanugarn.
World number one Lydia Ko was down the field on three-under 213. The South Korean-born New Zealander looked as if she might launch a charge with six birdies in nine holes from the eighth but a double-bogey at the last stopped her in her tracks.
"I hit a really wayward tee shot," said Ko after losing her ball at the 18th. "It's tough to finish like that.
"The best cure for a double-bogey is a toffee, or sugar, any type of sugar; I love my chocolate," she said laughing.
The third round was no laughing matter for Britain's Charley Hull as the Woburn member watched her title hopes go up in smoke with a triple-bogey seven on the first hole.
"I hit my drive left and then had a shot that flew off a downslope," said the 20-year-old after a 75 gave her a total of 214.
"I think it hit a path, hit a tree and ended up 60 yards over the right-hand side so I got a bit of bad luck there. Apart from that I felt like I played pretty decent, I just didn't hole any putts."
(Editing by Ken Ferris)
