The 'Wrecking Ball' hitmaker, who ended her engagement with Liam Hemsworth in September, and 'The Legend of Hercules' actor sparked romance rumours in December but things have already fizzled out between them.
A source told E! News that the duo "are not really hanging out anymore" due to their hectic schedules.
Another insider dismissed their relationship as merely a "quick fling" and explained it "just kind of burned out."
The 21-year-old starlet was spotted hanging out with the 28-year-old 'Twilight Saga' heartthrob in Las Vegas and Miami last month and while they were "never serious," a source said, "there definitely was a fling there."
The pair are still friends and Kellan recently described Miley as an "amazing girl."
He said: "I love hanging out with her because she is who she is and she's such a shining star."
Kellan also said he understood why people were interested in the idea of them being a couple.
He said: "For Miley, I've been friends with her for six years now and we run in the same circle...it's always interesting when two public figures who might be single are seen together. Oh let's start a rumour that they might be together...I just laugh it off."