"This story is entirely untrue," Martin's representative told Usmagazine.com.
Martin has been married to Oscar winner Gwyneth Paltrow for six years. They are the parents of two young children.
Another source told Usmagazine.com Martin and Paltrow are "more than fine" and the musician's alleged encounter with Bosworth "simply never happened."
"(Bosworth) may have been in the same room with him, but he is not having an affair, was not kissing her or holding her hand," the insider said.