The X Factor USA judge was linked to the 'What Makes You Beautiful' singer after he revealed that he has got in touch with Lovato and is waiting to see "what's going to happen".
Asked in an X Factor promo video if she is dating Horan, the ex-Disney star said: "No, I'm not. He's really sweet and he's one of my really good friends now.
"But I'm single at the moment and I plan to be for a long time because I need to focus on my career and myself and my wellbeing before I think about getting in a relationship with anyone."
Lovato also opened up about her love-hate relationship with fellow X Factor panelist Simon Cowell, who is alleged to be spurring on her romance with Horan.
"We have fun together and he does tease me a lot, but I give it back to him," she said. "I don't mind. He's sometimes not very nice to me, but I have fun with him."
Lovato recently declared that she has become a better person after making a lot of mistakes in her life.