Rumours had earlier ran rife that she was having a relationship with her female best friend, Judy Ogle.
But Dolly Parton has put any doubt about her sexual orientation to rest in a new interview on Nightline.
The 66-year-old, who has been married for 46 years to Carl Thomas Dean, says that she is not having a top secret liaison with her best pal.
'Judy and I have been best friends since we were like in the third and fourth grade,' she said in the interview.
'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.'
Like Parton, Oprah Winfrey also became the subject of speculation surrounding her sexuality and was rumoured to be having a relationship with her own best friend Gayle King.
The Country music star says she has since bonded with the talk show queen over the false whispers about their pals.
During her interview, Parton also recalled the time she entered a drag show and lost the competition.
'They had a bunch of Chers and Dollys that year, so I just over-exaggerated -- made my beauty mark bigger, the eyes bigger, the hair bigger, everything,' she said.
'All these beautiful drag queens had worked for weeks and months getting their clothes.
'So I just got in the line and I just walked across, and they just thought I was some little short gay guy.. but I got the least applause.'
Dolly, who hosts a 'Gay Day' at her theme park Dollywood in Pigeon Forge, Tennessee, is a proud supporter of LGBT rights.
She explained that she had since received threats from white supremacy group, the Ku Klux Klan.
'When it first started there were people giving us threats, I still get threats,' she explained.
'But like I said, I'm in business. I just don't feel like I have to explain myself. I love everybody.
'When they played it at her funeral and they lifted her coffin up, man, it was like somebody stabbed me in the heart with a knife,' she said. 'It just overwhelmed me.'
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'.
Parton is one of the most successful female country artists of all time and has an estimated 175 million in album sales.