The former EastEnders actress is said to have been in a relationship with former stockbroker Dave Fairbairn for six months.
Fairbairn was previously jailed for importing a huge order of ecstasy to the UK. Police discovered 839,500 ecstasy tablets worth an estimated £7.5million.
He was sentenced to 15 years in prison in 2003, but served just seven years before being released in 2010.
Taylforth reportedly spent Christmas with Fairbairn at her home where she lives with her two children, according to the Sunday People.
A source said: "She is in love with Dave and she knows everything about his past. He is a changed man and she is extremely happy with him.
"Gillian really hopes that this relationship works out. She thinks it's about time she had some luck with men."
Fairbairn was in attendance when Taylforth entered the Celebrity Big Brother house on Thursday night (January 3).
Gillian Taylforth has been linked with a new role in Hollyoaks after she leaves the reality TV series.
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