The singer-and-actress - who initially split from the Australian actor last year after 18 months together - decided to give the relationship another go following parents Tish and Billy Ray Cyrus calling off their divorce.
An insider told website HollywoodLife.com: "Miley is so thrilled at her parents reconciling, and it made her stop and think that Liam is someone special in her life. Their feelings for each other never stopped, and now that their schedules are better suited for each other, they have been able to work it out. Plus her parents trust Liam.
"They started talking more at the same time Miley`s parents were mending things. They started getting back together around Valentine`s Day (14.02.11) and are now back on as boyfriend and girlfriend."
The news of the reconciliation comes after Miley revealed she is "not single".
The 18-year-old beauty - who was recently romantically linked with British actor Joshua Bowman after meeting him on the set of new movie `So Undercover` - said during a recent interview on an Australian radio show ahead of her visit to the country in June: "I don`t want to cross out the Australian boys but I may or may not be single ... I love Australian boys though obviously.
"Liam and I are very close, I`m not going to comment too much, but you guys don`t have to worry about that ... I`m definitely not coming to Australia single."