The 66-year-old star, who has been married for 46 years to Carl Thomas Dean, in an interview on Nightline shot down rumours about her sexual orientation.
"Judy and I have been best friends since we were like in the third and fourth grade. We still just have a great friendship and relationship and I love her as much as I love anybody in the whole world, but we're not romantically involved," Parton said.
Like Parton, Oprah Winfrey also became the subject such rumours over her friendship with Gayle King.
The singer says she has since bonded with Winfrey over the issue.
"Like Gayle, her friend, Judy, my friend ... (people) just think that you just can't be that close to somebody," she said.
Parton is currently promoting her new memoir 'Dream More: Celebrate the Dreamer in You', a book that puts "my own personal spin on my life".
The singer is one of the most successful female country artists of all time and has an estimated 175 million in album sales.
