The 68-year-old actor and the 64-year-old actress announced their split in October after 30 years of marriage but have been working on their relationship in past months and have decided to give their union another chance.
A source told People magazine: 'They love each other. Always have and always will.'
Second chance: Danny DeVito and Rhea Perlman have decided to call off their separation
Danny and Rhea met when she went to see off-Broadway play, The Shrinking Bride, which the actor was appearing in.
The couple - who have three children Lucy, Grace and Jacob - founded production company Jersey Films, which is behind 1994 crime movie Pulp Fiction as well as Garden State and Freedom Writers.
Longtime couple: The pair, seen here in 2010, have been married for 30 years
Not ready to say goodbye: A source said the couple, who never filed divorce papers, 'always have and always will' love each other
Asked about life as a single man, he said: 'It's not something you adjust to. Rhea and I are really close. Actually, still together, just separate, but together.'
Asked if they were getting back together, he added: 'We're working on it.'
Happy together: Danny has previously stated that he and Rhea were working on their relationship