Rory McIlroy was disappointed to three-putt the last and finish fourth but pleased his game is moving in the right direction just 17 days before the Masters.

The world No 3  began the final round of the Arnold Palmer Invitational five strokes behind leaders Kevin Kisner and Charley Hoffman on six-under-par following an immaculate, seven-under 65 in Saturday's third round at Bay Hill. 

But while that late three-putt meant he finished two shots behind Australian Marc Leishman, he had the satisfaction of going down with all guns blazing and left Bay Hill feeling he's close to peaking for a tilt at the final major he needs to complete the career Grand Slam and enter the history books.

He stood over his 153-yard approach to the 18th just a shot behind Leishman, who had just eagled the 16th from 50 feet to sneak up on the rails and snatch the lead on 11-under.

Convinced he needed a birdie to have any chance, McIlroy hit his approach 30 feet beyond the pin, then raced his slick birdie chance eight feet past and missed the one back.

It was somewhat anti-climatic as he signed for three-under 69 that relegated him to a share of fourth with the tempestuous but talented Englishman Tyrrell Hatton (71) on nine-under par.

But having opened with rounds of 74 and 71 to find himself 11 shots off the lead at halfway, McIlroy was looking only at the positives as he finished the week two behind Leishman, who ended his five-year wait for a second PGA Tour win in style but getting up and down for two gutsy pars on the last two greens.

"Conditions were tough, the greens got firm and the wind was up but I thought going out if I could shoot anything in the 60s it would be a good score," said McIlroy, who was 11 shots off the lead at halfway but played the last two rounds in 10-under-par to move back to world No 2 ahead of Jason Day, who tied for 23rd.

"I was trying to shoot a couple lower than that but overall I played well. I am pleased with how it went this weekend."

Asked about his costly three-putt at the 18th, the 27-year old confessed that he had no choice but to go for broke and what would have been his eighth birdie of the day.

"I saw Leishman eagle 16 and felt I needed to birdie the last hole and I was overly aggressive with the putt and missed the one coming back," he said with a sheepish grin.

"But it has been a good week and if anything, to be one-over after two rounds and finish like this, I can't complain too much.

"It would have been nice to give it a better go with the chances I had on 17 and 18. But hopefully I can get back up on the horse next week and get it going at the [WGC Dell Technologies] Match Play." 

McIlroy hit some huge drives as he raced to four-under-par for the day with five to play, closing to within two shots of Kisner on 10-under par. 

Needing a hot finish to keep his hopes alive of a 14th PGA Tour win, he short-sided himself and bogeyed the par-three 14th but saw Kisner return the favour with bogeys of his own at the 12th and 14th.

The Irish star then boomed a 371-yard drive over the corner of the dogleg at the 15th so he could attack a tight front pin. But missed an eight-footer chance that would have left him just one adrift.

Still, he wasn't quite done.

After a 363-yard drive at the par-three 16th, he almost chipped in for eagle after flying the green, but tapped in for birdie to find himself in a three-way tie for the lead on 10-under with Kisner and Hoffman, who had followed a birdie at the fourth with four bogeys in five holes.

The 40-year old Californian had turned for home four shots adrift of Kisner before back-to-back birdies at the 12th and 13th got him back into contention.

Just when it looked like a three-horse race, Leishman holed that 50-footer for an eagle three at the 16th to take the lead.

McIlroy was not at his best over the first two days and he went into the weekend 11 strokes behind Hoffman on one-over par.

But was back to his best in perfect conditions at the weekend, single putting ten times in a 26-putt third round and driving the ball more confidently than ever. 

He knew he needed a fast start to last night's final round to have any chance and produced the goods with his driver his biggest ally.

He brilliantly birdied the first from the fairway bunker, bogeyed the third after finding water with a short iron but then followed birdie fours at the fourth and sixth with a bogey at the par-three seventh, where he bunkered his tee shot.

Back-to-back birdies at the ninth and 10th, where he hit wedges close after drives of 383 and 305 yards respectively, got him to within four shots of Kisner, who was 13 under par after seven holes

When McIllroy holed a testing four and a half footer for a birdie four at the 12th to get to 10-under par and four-under for the day, he was just two behind.

He then birdied the 16th to get back to 10-under and with Kisner and Hoffman making mistakes, it took a great finish from Leishman and a 72-hole three-putt to deny the Ulsterman.

"Oh, it's amazing, obviously," said Leishman, who was seeking his second victory following the 2012 Travelers Championship and can now look forward to playing in the Presidents Cup.

"It's such a special year to honour Mr Palmer how they have. It's unbelievable. Obviously, it's sad not to have him up there on 18, but to play how I did and to win any tournament's huge, but especially this one. 

"You get the extra year exemption and everything that comes along with that. So it's a Presidents Cup year, there's a lot of reasons that I wanted to play good. My family is here, it's just a special day and couldn't have worked out any better."

Graeme McDowell, meanwhile, admitted that he struggled with his ball-striking and a one-over-par 73 left him tied 28th on one-under-par.