For months Only Murders in the Building costars Martin Short and Meryl Streep have been fending off gossip they are Hollywood’s latest power couple. “They’ve known each other for years, but they’ve gotten closer since the show,” says a friend.

The three-time Oscar winner joined Season 3 of the hit Hulu streamer as Loretta Durkin, an ironically terrible actress, who is the star of Death Rattle, a play put on by Martin’s struggling Broadway director Oliver Putnam. Along the way, Loretta becomes a suspect in a murder that podcasters Charles Haden Savage (Steve Martin), Mabel Mora (Selena Gomez) and Oliver are investigating. “Meryl loves Martin’s energy and enjoys his company,” says the friend.

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The pair officially deny a romance, but who could blame them for testing the waters in private? “It’s definitely a budding romance,” says an insider, who witnessed the actors’ chemistry over dinner at Santa Monica’s Giorgio Baldi. “They appeared to be more than friends.”

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And why not? Meryl, 75, has been separated from her artist husband Don Gummer for more than six years, while Martin, 74, lost Nancy Dolman, his wife of 30 years, to cancer in 2010. “Martin doesn’t feel guilty about moving on,” says the friend. “He only feels a bittersweet guilt that he’s still here enjoying this new brush with fame and Nancy isn’t here to enjoy it with him.”

He and Meryl “get a huge kick out of the rumors. They think it’s hilarious,” adds the friend, who confesses to being among the people rooting for a love connection.
“They flirt with each other, so who knows where it will lead?” says the friend. “They ’re both single, and they do make a really cute couple.”

—Reporting by Rick Egusquiza