From PEOPLE Magazine Click to enlarge
After wowing onlookers on Feb. 28 at the London premiere of her new movie Oz the Great and Powerful in a strapless, peacock-feather-adorned confection, Michelle Williams was ready for a change. She ducked out of the premiere party at the swanky Claridge's hotel, changed into something more comfortable (a casual floral dress) and kicked back with friends. By 11 p.m. a relaxed, beaming Williams was sipping white wine at the hotel bar with costars Zach Braff and James Franco and describing the details of a recent meal in London: "I ate so well," she told her pals, "I could not have been happier."

Considering Williams, 32, had just come off a split from her boyfriend of one year, How I Met Your Mother star Jason Segel, 33, friends of the actress say they're happy to see that her sense of joie de vivre is intact. "In these last few days since her breakup, she's been in a great mood," says a source who worked with the actress. According to multiple sources, Williams has no hard feelings about the split, which she seems to have initiated. "She was tortured about this for a while," says a source who knows the couple. "She had some great times with him, but she was unsettled about it being permanent. There were some things missing."

From the start of their relationship, the happy-go-lucky, rough-around-the-edges Segel and the delicate, reserved Williams seemed to be a perfect, if unlikely, match. Friends and fans hoped this could mean happily-ever-after for the actress, who was shattered by the death of Heath Ledger, her ex and Matilda's father, from a drug overdose in 2008. With Segel, Williams found joy: "I've never seen her happier," said a source close to her. Almost immediately the actor began showing serious fatherly potential, bonding with Matilda on trips to the Bronx Zoo and while shopping in Los Angeles. "They seemed like a family, always relaxed and happy," says an observer at the Brooklyn Crab restaurant in Red Hook, Brooklyn, where the trio often dined together. But as things got more serious, Williams was forced to examine their future. "Jason never got rid of his place in L.A., and Michelle's life with Matilda has always been in New York," says a source in her inner circle. "While Jason made every effort to make them a priority, he still couldn't drop everything and leave his life and career in L.A. Michelle couldn't move things forward unless he was in their lives 100 percent."

No stranger to the concept of beginning again, Williams is keeping busy with work and settling back into a routine for her daughter. "She's sad things didn't work out, but she's not going to sit at home and cry," says the inner-circle source. "Michelle's No. 1 priority, something that will never change until the day she dies, is Matilda." Despite the heartbreak she's already known, Williams remains a hopeful romantic. While promoting Oz, not long after the split, she summed up her role to a reporter. "She's waiting-aren't we all?-for her prince to come," Williams said. For now, the wait continues.

  • Contributors:
  • with Jennifer Garcia,
  • Linda Marx,
  • Janine Rayford,
  • Patrick Gomez.