According to People magazine, the Duchess of Cambridge was spotted enjoying herself at the low key gathering, accompanied by her sister Pippa Middleton.
"Kate looked incredible," a source told the US publication. "She was very jolly and very happy."
They added that she "has really got her figure back. If anything she actually looks better now than before she had Prince George."
After an eventful 2013, which saw her become mum to Prince George in July, it’s no wonder that Kate enjoyed some time with her younger sister and close friends. Her husband Prince William and five-month-old son were reportedly not in attendance.
The fellow partygoer observed: "The thing that really strikes you is that she is just so normal and smiley. There are no lights on Kate here, so she can be totally relaxed and herself.
"I came away from the party thinking, 'She looks really happy.' Kate really is glowing and full of life."
Kate, 31, who has proven herself as down-to-earth and a lover of time with family and friends, was reported to then spend New Year's Eve at the Middleton's family home in Berkshire along with William and baby George.
The Sunday Express reported that, after spending Christmas with the rest of the royal family, the trio were set to leave Sandringham on either Sunday or Monday and head to Bucklebury to see Kate's family.
"William and Kate are just like any normal couple and want to spend time with both families," a friend told the Express. "This year they are seeing in 2014 with Catherine's family.
"William likes being at Sandringham," the friend added. "But he also loves the informality of staying with Kate's parents and just chilling out in a normal family environment."