Hudson and Wilson
Jean Baptiste Lacroix/Wireimage; Jeff Vespa/Wireimage
02/28/2008 at 02:00 PM EST
and Owen Wilson
may have split last summer
, but the pair reunited – and appeared very cozy – at the Oscars over the weekend.
As PEOPLE reports in its new issue (on newsstands Friday), the pair flirted at Madonna's exclusive post-Oscar party Sunday night. Spotted by an onlooker near the souvenir booth, "There was lots of arm touching, giggling," says the eyewitness. "They were having lots of fun."
Adds another observer: "They were all over each other."
The day before the Oscars, Wilson, 39, and Hudson, 28, met up twice – spending time at each other's homes.
– Jennifer Garcia, Jeffrey Slonim and Pernilla Cedenheim