"(The rumours) are 100 per cent not true," the 45-year-old actor told Entertainment Tonight.
"In fact it's quite hilarious because we simply danced at a charity event along with a lot of other people."
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The event in question was the star-studded Night of Legends benefit in the Hamptons at the end of August.
An eye-witness said that Katie, 34, hit the dance floor with Jamie when Lenny Kravitz took to the stage to perform American Woman with Bon Jovi, and at one point was seen sipping from Jamie's cocktail.
Mum-of-one Katie split from Tom Cruise, her husband of five years, in June 2012.
The couple reached a divorce settlement within two weeks, and their case was closed in August of that same year.
Top Gun actor Tom, 50, married Katie in a spectacular Italian castle ceremony in November 2006, seven months after the birth of their daughter Suri.
It was Katie's first marriage. Tom had previously been married to Nicole Kidman, with who he has two adopted children, and actress Mimi Rogers.