As many has pointed out IO::Pty is the right module to use. The buffer comes from the external program, not the IPC::Open3. Posted below is the complete program to demonstrate how this is done with IO::Pty.

#!/usr/bin/env perl -w

use strict;
use IO::Pty;

my $master = new IO::Pty;
my $slave  = $master->slave();

my $pid = fork();
die "Couldn't fork: $!" unless defined $pid;

if ($pid) {
    $master->close_slave();

    while ( !$master->eof ) {
        my $line = $master->getline;
        print "TIME: " . localtime() . " OUTPUT: " . $line;
        if ( $line =~ m/^Please press return/ ) {
            $master->print("abc\n");
        }
    }
    wait();
    exit $? >> 8;
}
else {
    $master->close();
    $master->make_slave_controlling_terminal();

    open( STDIN,  ">&", $slave ) or die "Couldn't dup stdin:  $!";
    open( STDOUT, ">&", $slave ) or die "Couldn't dup stdout: $!";
    open( STDERR, ">&", $slave ) or die "Couldn't dup stderr: $!";

    # External program with buffered IO.
    system q( perl -e ' print "Please press return\n";
                        my $line = <STDIN>;
                        print "OK, $line, exit now\n";
                        exit 14;
                      '
            );
}
[download]

If you run the program, you will get this:

TIME: Thu Jul  3 19:30:47 2014 OUTPUT: Please press return
TIME: Thu Jul  3 19:30:47 2014 OUTPUT: abc
TIME: Thu Jul  3 19:30:47 2014 OUTPUT: OK, abc
TIME: Thu Jul  3 19:30:47 2014 OUTPUT: , exit now

The second line comes from echo to the $master, how do I turn off echo?