The super-short outfit, which had a serious retro '90s throwback vibe, showed off the 36-year-old star's long legs and featured a full-length zipper up the front.
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A source told ET that Katie rocked the surprising, sexy look as part of the film All We Had, which she's shooting in Queens, New York. This particular scene, shot at a Walmart, featured Katie with her on-screen daughter, 17-year-old actress Stefania Owen.
Katie was also seen taking a swig from a large plastic container of orange juice, with a noticeable bump in the belly area.
The film is Katie's directorial debut, and an eyewitness on told ET that the former Dawson's Creek star is seems to be handling her responsibilities well, relying on her assistant director and spending time with the cast and crew.
FLASHBACK: Katie Holmes through the years:
FLASHBACK: Katie Holmes through the years
Katie Holmes shows skin in super tiny denim minidress while filming at Wal-Mart
Actress Katie Holmes during an interview with host Jay Leno on August 11, 1999 (Photo by Paul Drinkwater/NBC/NBCU Photo Bank via Getty Images)
Actress Katie Holmes and mother Kathleen Holmes attend the 'X-Men' New York City Premiere on July 12, 2000 at Ellis Island in New York City. (Photo by Ron Galella/WireImage)
Actor Tom Cruise and fiancee/actress Katie Holmes leaving a midtown hotel December 14, 2005 in New York City. (Photo by Arnaldo Magnani/Getty Images)
Victoria Beckham and Katie Holmes during Victoria Beckham and Katie Holmes Sighting in Paris - October 6, 2006 in Paris, France. (Photo by Pierre Suu/FilmMagic)
Tom Cruise, Suri Cruise and Katie Holmes visit the Plaza Hotel on December 20, 2010 in New York City. (Photo by James Devaney/WireImage)
Katie Holmes during an interview with host Jimmy Fallon on November 15, 2012 -- (Photo by: Lloyd Bishop/NBC/NBCU Photo Bank via Getty Images)
Valentino Garavani, Katie Holmes, and Giancarlo Giammetti attend the Valentino Sala Bianca 945 Event on December 10, 2014 in New York City. (Photo by Dimitrios Kambouris/Getty Images)
The Tonight Show Starting Jimmy Fallon: Actress Katie Holmes on July 23, 2015. (Photo by: Douglas Gorenstein/NBC/NBCU Photo Bank via Getty Images)
INGLEWOOD, CA - MARCH 28: Suri Cruise (L) and actress Katie Holmes (R) with guest in the audience during Nickelodeon's 28th Annual Kids' Choice Awards held at The Forum on March 28, 2015 in Inglewood, California. (Photo by Lester Cohen/KCA2015/WireImage)
Production is expected to continue for the next 20 days in various locations, many outside of New York. The film, which follows Katie as an impoverished single mother trying to raise her 13-year-old daughter, is set in the Midwest.