The plaintiff, identified only as John Doe, claims the Grease star touched his genitals and offered up a sexual proposition after hiring him for a massage.
The alleged victim recently filed assault and sexual battery charges against Travolta in a federal court, but the actor's legal team has dismissed the suit and has vowed to take its own court action over the allegations.
A statement released to E! News reads, "This lawsuit is complete fiction and fabrication. None of the events claimed in the suit ever occurred. The plaintiff, who refuses to give their name, knows that the suit is a baseless lie... On that date when plaintiff claims John met him, John was not in California and it can be proved that he was on the East Coast.
"Plaintiff's attorney has filed this suit to try and get his 15 minutes of fame. John intends to get this case thrown out and then he will sue the attorney and Plaintiff for malicious prosecution."
The unnamed victim is seeking $2 million (£1.25 million) in general damages, unspecified punitive damages and court costs.