The two met at an unidentified event in Colorado Friday night on Franklin's 18th birthday. Harry led a crowd of well-wishers to sing "Happy Birthday" to the swimmer, USA Today reported Saturday.
Earlier in the evening, Prince Harry teased Franklin for not having won a silver among her four golds and one bronze medal during the London 2012 games.
"So you went straight from bronze to gold," he said. "What about silver? You skipped that one!"
Franklin said she loves the royal family.
"All my friends can't believe how lucky I am to be here," she said.
Harry and Franklin were scheduled to spend more time together Saturday at the opening ceremony for the Warrior Games for injured veterans, USA Today said.