The 23-year-old "Good for You" singer and the One Direction member were seen spending the evening close to each other, reported Us magazine.
"Niall and Selena were seen kissing in the middle of the club, in front of everyone," a source said.
They definitely seemed very close and like they were together. Niall got there first with his bodyguard, then the next thing I know, I looked over and Selena was there. They were very close together, talking and whispering," the insider added.
The 1D star later took to Twitter to share a picture with the former Disney star, along with other friends.
"LA squad," he captioned the photo taken during the party.
The two stars first sparked dating rumours after getting photographed together while enjoying dinner with group of friends last month.