Wallace screwed three of his last five holes to complete a bogey-free lap at Fairmont St. Andrews and break away from compatriot Garrick Porteous, who also shot 66 in the penultimate group.
Wallace started the day with Spaniard Adrian Otaegui, who shot 70 and lost four strokes off pace.
Full field results from the Scottish Championship
The only other player within five strokes of Wallace is Sean Crocker of the United States after he was 67.
The 51st Wallace is a four-time European Tour winner. Three of these victories came in 2018.
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