Great Britain moved into silver medal position going into the final day of the team eventing after a superb cross-country display in testing conditions.
Zara Phillips, making her Olympic debut, Nicola Wilson and Tina Cook all produced clear rounds inside the optimum time over the 28-jump course as Great Britain finished on 130.2 points.
Germany retained the lead on 124.70 while Sweden are third on 131.40.
Cook lies fifth in the individual standings, with Mary King sixth.
A fantastic day for the home nation sets the stage for a thrilling finale in the showjumping competition on Tuesday.
Former world champion Phillips, the Queen's granddaughter, is joint 10th on High Kingdom, while Nicola Wilson is 20th on Opposition Buzz.
But world number one William Fox-Pitt slipped to 22nd after suffering 9.2 time penalties in a disappointing ride on Lionheart.
Wilson, among the early starters in the south-London sunshine, set the tone for a great day for the home team, finishing almost 12 seconds inside the time limit of 10 minutes and three seconds.
She produced a flawless ride over a hilly course featuring stunningly crafted obstacles with British themes.
On a day of high drama, the course claimed 15 casualties and the competition had to be delayed five times because of fallers.
But King held her nerve on Imperial Cavalier before Phillips - on the first anniversary of her wedding to former England rugby union captain Mike Tindall - produced a ride on High Kingdom that delighted the 50,000 crowd.
The Duke and Duchess of Cambridge, Prince Harry and the Duchess of Cornwall watched from the VIP seats in the 23,000 capacity arena as Phillips cleared the Tower of London twin jumps before punching the air as she crossed the line in nine minutes 56 seconds - the fifth fastest time of the day.
"The crowd was amazing all the way along," said Phillips, who missed the last two Olympics because of injury to her previous horse, Toytown.
"All these people being here is just incredible. It really makes you want to do better, to go faster.
"My horse is such a dude. He lost a front shoe, so he really stepped up today. The course was very suitable for him."
Former European champion Cook was only two hundredths of a second slower than Phillips as she moved up nine places in the overall standings and into genuine medal contention in Tuesday's finale.
Germany's Ingrid Klimke leads with Sweden's Sara Algotsson second and New Zealand's Mark Todd, chasing a third Olympic gold, third.