The 25-year-old from Vocklabruck had an excellent start carding two birdies on the first two holes and making seven consecutive pars in a row.
At the turn, Muehlbauer had a bogey on the tenth but kept her cool to card two further birdies on holes 14 and 15.
However, the Austrian finished with a bogey to secure a one-shot lead ahead of her playing partner for two days, Slovenia’s Katja Pogacar and England’s Hannah Screen.
Speaking about her second round, Muelhbauer said: “I’m feeling pretty good, my game is quite solid, and I haven’t made many mistakes.
“If I miss the green, I make up and down, I am hitting the fairways and hitting my approach shots close especially yesterday.
“Today the putting is good, so overall I’m feeling super confident, and I can’t wait to tee it off tomorrow.”
Muehlbauer has had a consistent season after making all the cuts at nine LETAS events so far, including two top-10 finishes at the Flumserberg Ladies Open and the Link Series event at Ramside last week.
The Austrian is now hoping to use her previous experience of being in the leading group last year to her advantage.
“It’s not the first time I’ve been in this position. I hope I’ve learned from that. Being in the leading group is always something special and I’m just having fun out there, enjoying it and we will see what happens.”
For the last two days, Muhlbauer has played alongside Pogacar who is currently one shot behind her going into tomorrow.
Speaking about playing with her competitor, Muhlbauer said: “It was very good to play with Katja these last two rounds, it’s always good to have someone who is a bit of a match, a friendly high-quality match.
“So, I hope I’m playing with her again tomorrow and we can keep it up tomorrow as well.”
Muehlbauer came T-12 at Ramside Golf Club in 2022 and can’t praise the course enough.
“The course is very good and considering the wind and rain we have had it’s perfect. I really like playing a course twice. So, I’m looking forward to tomorrow.
“It would be amazing to win here, I really love this place, I loved it last year and loved it today.
“So, it would be very special but I’m not looking too much into the future, I’m just concentrating on tomorrow.
“It’s 18 holes to go, so a lot can happen. I will take it shot by shot and we will see in the end.”
Also one shot behind Muehlbauer is England’s Hannah Screen who is excited to put herself in the final group once again this week.
“I’m feeling good, I’m happy with where my games at. I missed a couple of putts today, so I’m hoping they’ll drop for me tomorrow.
“No nerves today, I really tried to play one hole at a time, and it helped us out with going out a little bit early.”
LETAS rookie Screen had her first top-10 finish last week placing tied eighth alongside Muehlbauer.
Now, the Hertfordshire based player is feeling confident heading into the final tomorrow.
“I’m definitely feeling more confident about being in the final group,” Screen admitted, “II hadn’t been in the final group in a while until last week, so I think doing it last week will help me if I am in the final group tomorrow.
“To win on English soil would be great, this is my first year as a professional and I can’t imagine a better way to do it on home soil.”
Screen has had last week’s winner Lianna Bailey as a roommate and now is determined to follow in her footsteps.
“Lianna has been my roommate for these two weeks, so we both had a good week last week, it must be something in the water we’re drinking. I now want to follow my roomie’s footsteps.”
Two shots behind lies the first week runner up Ireland’s Lauren Walsh on three-under-par.
Speaking about her round, Walsh said, “Today was good, I played well today and hit a lot of good iron shots and gave myself a lot of chances and rolled in one or two birdies.
“This course is a comfortable setting now which is nice. I hope I can do the same thing tomorrow and hole a couple more putts.”
The 22-year-old from Dublin only turned professional one month ago but two weeks ago made her debut appearance on the LPGA at the Dana Open, now she’s impressed at these two LETAS events closer to home.
“It’s great that I’ve got myself in contention to win tomorrow, I’m more determined after my second-place last week.
“As it turns out I lost by one so it really taught me that every shot counts out here so hopefully I can play well tomorrow and see if I can go one better.”
The cut fell at +5 with 52 players making it through to tomorrow’s final round at Ramside Golf Club.
Follow all the action of tomorrow’s final on @letaccess on Twitter and TikTok and LET Access Series on Facebook – #RaiseOurGame #linkseries