McCarthy shot a 64, the lowest round of the tournament so far, to lead by one with 18 holes remaining at the Andalusian PGA EuroPro Tour Championship.
He had begun the day two off the lead after a solid opening round of 67 in which he had dropped only one shot at Desert Springs.
He dipped three shots lower in round two thanks to two more birdies and no bogeys.
“My iron play has been great this week, they’ve left me some easy putts [in round two], and luckily I’ve been able to get the putter going,” said McCarthy.
McCarthy is currently 24th in the Order of Merit and knows only a win will open the door to the Challenge Tour next season,
He shot three rounds in the mid 70s in 2016 at Desert Springs and finished tied for 43rd.
He said: “Before I got here I would have said this isn’t a track that suits my eye, but I’ve managed to strike the ball well and put myself in great positions all week, so at 13 under I’d probably now say it does suit me.”
One shot back 12 is the experienced Bath-born Steve Surry who, despite not having a win to his name in his EuroPro Tour career since 2009, has plenty of experience across the European and Challenge Tours, as well as plenty of success on the Sunshine Tour this season.
Woodhall Spa’s Dave Coupland, who has two wins this season, completes the final leading group of the 2018 season.