The 20-year-old country singer and the movie star hunk reportedly spent Sunday (24.10.10) holding hands and looking loved-up whilst on a romantic walk around Brooklyn, New York.
An onlooker told Life and Style magazine: "Taylor and Jake were walking around Park Slope holding hands. They looked like a couple!"
This news comes shortly after Taylor - who has dated 'Twilight' star Taylor Lautner and was famously dumped by Joe Jonas over the phone - hit the headlines with her new album 'Speak Now', which she claims contains songs aimed at her ex-boyfriends.
She explained: "I will say everything in my music. There's been extreme joy, extreme pain, extreme curveballs. Sometimes when things impact you so intensely, it takes writing a song to get over them."
One track on her LP, titled 'Dear John', is also heavily rumoured to be aimed at 33-year-old singer John Mayer ' who she worked together on a track with last year and was believed to be secretly dating.
The song goes: "Don't you think I was too young to be messed with? Maybe it's you and your sick need to give love and take it away."
She denied it was aimed directly at him, but admitted it was a hard song to release for various personal reasons.
Jake, meanwhile, has been largely single since his relationship with actress Reese Witherspoon ended 10 months ago.