The rumours surfaced after Diaz was pictured with Cruise and fellow actors Penelope Cruz and Javier Bardem as she celebrated her 40th birthday August 30, reported Daily Mirror online.
Earlier, Cruise's representative had slammed the reports and now Diaz denies it.
"I happened to bump into Penelope Cruz, Javier, Tom and his son in a hotel and joined them for dinner. At midnight I said, 'I am 40'. So we took pictures and then said 'Goodnight, 'see you later, and I have not seen him since," Diaz said in a chat show.
"But the next thing I know, apparently I am dating him and it is full on and he is coming after me," she added.
Diaz was in a relationship with baseball player Alex Rodriguez for an year but parted ways in September 2011.