In an interview with Harper's Bazaar, she denied rumors the two former Charlie's Angels had been intimate.
Diaz, 42, said the idea of it "makes me want to vomit in my mouth."
"That's like saying I am having sex with my sister," she added. "Are you crazy? I wouldn't even menage with her!"
Diaz admitted on Bravo's Watch What Happens Live that she's had a sexual relationship with a woman before, and in an interview with Glamour, she said she finds women beautiful.
"And I think that all women have been sexually attracted to another woman at some point. It's natural to have connectivity and an appreciation for the beauty of other women," she said.