The 36-year-old welcomed baby Tennessee James, her first child with talent agent husband Jim Toth, on September 27.
"Everyone is bonding with the baby. And Jim has had a lighter workload and has been spending a lot of time at home with the baby as well.
"She definitely feels settled in her family life with Jim and her kids. They can't wait to start life with their baby," a source said.
Witherspoon was spotted dining out with the newborn at Huckleberry Bakery and Cafe in Santa Monica, California.