One-fifth of the British boy band, floppy-haired Styles, 18, has been spotted holding hands and flirting with contemporary country singer Swift, 22, in Los Angeles on the set of American X Factor.
"It was a big deal her inviting him to the show with her mum. It was her way of showing she is ready to trust him," a pal of Swift told The Sun.
The pair were introduced in the US in early 2012 but during a brief relationship, Styles was caught kissing a model while touring New Zealand.
"Taylor was really embarrassed by what happened and was nervous about giving him another go. But this time they have spent more time getting to know each other," the friend said.
The relationship news is sure to devastate the doting global fans of Styles and his band mates.
When One Direction toured Australia in April, concert tickets sold out in three minutes and teenage fans flooded city streets to catch a glimpse of the latest sensation from Britain.
