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Reese Witherspoon — Falling In Love Again!

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Mar. 30 2010, Published 4:40 a.m. ET

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She’s kept her relationship with CAA agent Jim Toth, 39, out of the spotlight for two months, but Reese Witherspoon was happy to show her feelings for her new beau recently. Chatting and laughing, they held hands while walking around Ojai, Calif., where Reese lives with children Ava, 10, and Deacon, 6.

The couple celebrated Reese’s 34th birthday (March 22) with lunch before taking an afternoon stroll.

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“Love was in the air!” an onlooker tells OK!.

OK! GALLERY: REESE WITHERSPOON HAS SOME NEW ARM CANDY

Friends confirm it.

“She’s really enjoying spending time with Jim,” an insider tells OK!. “He is a perfect gentleman, and since Reese is a Southern girl, she loves that about him.”

The romance has only added to her already-happy life. “She’s a force to be reckoned with,” the insider says. “She’s doing a great job raising her kids; her career’s on fire.… She’s hot!”

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