The 22-year-old actress split from her boyfriend of two years, Micah Alberti, earlier this month (Oct10).
She was reported to have moved on with Overstreet after the pair was spotted holding hands during a night out in Los Angeles on Saturday (09Oct10).
But Overstreet has now brushed off the speculation, insisting Willis was only holding his hand to coax him into dancing.
He tells U.S. host Ryan Seacrest on his radio show, "If you go out in public anywhere, people are going to assume you are dating. We're just friends. She tried to get me to dance and I'm not a really good dancer, so I was hesitant on that one...
"You know, there are tons of girls that I'm friends with, and I'm sure if I get snapped with them people are going to think we are dating. I'm just friends with a lot of different people. (Rumer) is a nice girl."
The 22-year-old actress was dating Micah Alberti for two years but rumours emerged earlier this month (Oct10) suggesting the pair had split.
Now Willis has sparked speculation she already has a new boyfriend after she was spotted holding hands with Overstreet and kissing him during a party in Los Angeles on Saturday (09Oct10).
Willis and Overstreet are also said to have enjoyed a night out with Glee star Mark Salling in Las Vegas last weekend (02-03Oct10), reports People.com.
A source tells the website, "Chord was flirtatious with Rumer. They had a ?lot of fun."
Details of the split are unclear, but Life & Style magazine reports Rumer and Micah Alberti are no longer a couple.
A source tells the publication, "Rumer is very upset. She went to Las Vegas this past weekend with a few friends to try to cheer up and have fun, but she's very sensitive about the breakup."
Demi Moore and Bruce Willis were rumoured to have been celebrating after their 21-year-old daughter accepted a marriage proposal from her longtime boyfriend, model Micah Alberti.
Rumer and Alberti were allegedly spotted shopping for wedding bands and preparing to hold their nuptials in June (10) - but a spokesperson has dismissed the stories.
A spokesperson for Rumer tells GossipCop.com the report is "not true," adding, "She is not engaged."
The young actress, whose parents split when she was just 12, toasted the landmark age at celebrity hangout Tao at the Venetian Hotel in the gambling Mecca.
Willis was joined by her whole family, including her famous father and his new wife Emma Heming, mother Moore and her husband Ashton Kutcher, her younger sisters Tallulah and Scout, as well as her boyfriend, Micah Alberti, The Hills star Audrina Patridge and other cast members of her upcoming movie, Sorority Row.
Willis was handed two birthday cakes and the guests were treated to a performance from a troupe of Sin City showgirls, an Elvis look-a-like and a Madonna impersonator.