The actress was appalled by the magazine's cover story, which featured the headline 'ADDICTION NIGHTMARE - Katie DRUG SHOCKER! - The Real Reason She Can't Leave Tom'.
The article does not allege any drug use by Holmes, but she still feels the suggestive cover is clearly defamatory, and she has instructed her lawyers to act.
A representative for the Batman Begins star tells TMZ.com, "Star Magazine's malicious claims about Katie are untrue, unethical and unlawful.
"Not only do they cruelly defame Katie, they play a cheap trick on the public, making ridiculously false claims on the cover unsupported by anything inside."