The Miss USA runner-up whose gay marriage flap during the pageant drew searing criticism has reportedly cuddled up to Phelps at baseball games and dined out with the hunky Olympian, her grandmother said.
Phelps, who is frequently seen with a stable of girls, denies he is dating the beauty queen.
"I'm not dating anybody," he told Usmagazine.com. "I'm single. My private life stays private."
The swimmer has been laying low since photographs showing the Olympic champion with a bong in hand at a house party surfaced in the media -- but he did defend the the pageant runner-up's right to an opinion.
"That's the cool thing about America -- everybody has their opinion," he told the magazine. "I'm not saying I support her. I'm not saying I don't support her."
The beauty queen's grandma said Carrie isn't looking for anything serious.
"Carrie knows that he has dated lots of girls but she enjoys going out with him and isn't serious about being in a relationship with him," she said. "He's a nice guy and she likes him."
Billy Bush, who hosted the pageant, pressed her on the relationship rumors.
"That's not appropriate to answer right now. He's a great man... You can call me on a later day and we can talk about that."
The beauty queen came under fire this week for dissing gay marriage when asked about same-sex marriage during the pageant.
"In my country and in my family, I believe that marriage should be between a man and a woman -- no offense to anyone out there," she said.