Katy and Taylor fell out when the "Roar" singer nabbed Swift's dancers for a tour and they bickered in the media and in the lyrics to their songs for several years before Perry urged her pop rival to stop fighting with her and become friends.
She sent Swift an actual olive branch to make it clear she was serious about ending their feud and now she has appeared in Taylor's new "You Need to Calm Down" video, hugging her new pal.
Swift tells the U.K.'s Capital Breakfast radio show that she and Katy have been on "good terms" for some time after meeting at a couple of parties following the olive branch gift.
"We saw each other at a party and walked up to each other and hugged it out and talked about things," she says. "Then saw each other again and hung out at another party. It was just like something felt so much lighter about my life when things became really good between us."
But Swift wanted to make sure that she and Perry were "solid" before announcing their reconciliation to fans.
"She and I have been fine for a while and really on good terms but we didn't know if we were ever gonna really tell people about it," she adds. "We wanted to make sure that was solid between us before we ever made the public aware."