The married country singer addressed the sexuality rumours in a Nightline interview by comparing herself to Oprah Winfrey, who has also frequently been the subject of tabloid reports.
"Gayle [King], her friend, Judy, my friend, they just think that you just can't be that close to somebody," Parton said of the press.
She continued: "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."
The '9 to 5' singer has actually been married for 46 years to Carl Thomas Dean, who rarely makes public appearances with Parton.
Parton appeared on Nightline to promote her memoir Dream More, which is now available for purchase.
Watch Dolly Parton's Nightline interview below: