updated 12/28/2013 AT 1:00 PM ET
•originally published 12/28/2013 AT 3:20 PM ET
The pair arrived separately at the grand opening of Beacher’s Madhouse – Cyrus walking in with showman Jeff Beacher and Lutz arriving an hour later with friends.
They kept their distance early on – even partying at separate tables for a portion of the night – but hooked up later.
Lutz, 28, wearing a leather jacket and a dark baseball cap, headed to Cyrus’s VIP table at about 2:30 a.m.
“They talked a very close range for a long time while Miley was laughing and rubbing his back,” an onlooker says. “At one point she kissed his ear.”
About an hour later the duo exited the new Vegas nightclub.
“They left in the same large group, but Kellan was a few steps behind her the whole time,” the source says. “Most of the people chasing after Miley didn’t even notice him right behind her. He did a pretty good job of blending in.”