The twosome grabbed a bite to eat at Café Midi with friends on Sunday, where they engaged in some serious mid-meal PDA.
"They seemed very happy," an eyewitness tells E! News.
Sheen was seen wearing a brown sports coat with a gray T-shirt underneath, while Silverman was slightly more casual in a black cardigan and white baseball cap.
Rumors that the pair is dating have been swirling about the two actors for the past several weeks.
Silverman and her new leading man were first spotted together at Sheen's 45th birthday at West Hollywood eatery Craig's on Feb. 6.
The comedienne drove the birthday boy to his dinner and helped him unload his gifts into the trunk of her car.
An insider close to the famous duo told E! News at the time that they were "hanging out and having a giggle.
"She really makes him laugh. I wouldn't call it dating, per se."
Be sure to tune in to E! News tonight at 7 and 11:30 p.m. for more on Michael Sheen and Sarah Silverman!