The 68-year-old Wall Street actor and 67-year-old Annie Hall actress were spotted on Monday filming the Rob Reiner comedy And So It Goes in Connecticut.
Douglas and Keaton have decades of acting experience between them, but the comedy marks the first time they'll share the big screen.
On set: Michael Douglas and Diane Keaton filmed scenes on Monday in Connecticut for their new film, And So It Goes
The role of the granddaughter went to young Sterling Jenis, who portrays Brad Pitt's daughter in the upcoming zombie movie World War Z.
Keaton portrays spunky and endearing neighbor Leah who helps Oren form a relationship with the girl as romance ensues between them.
Big bear: Diane carried a large stuffed animal during filming
It's the first time that Keaton will be directed by Reiner, who also has helmed the popular movies Stand By Me, The Princess Bride, Sleepless In Seattle, A Few Good Men and This Is Spinal Tap.
The supporting cast of And So It Goes includes Frankie Valli, Frances Sternhagen and Scott Shepherd.
Comedy drama: Michael Douglas portrays a self-centered real estate agent in the movie
Star casting: Douglas and Keaton are featured in
the movie with young Sterling Jenis who portrayed Brad Pitt's daughter
in World War Z
The Romancing The Stone favourite quickly backtracked on his claim that his cancer was caused by human papilloma virus, a sexually transmitted disease that can be contracted after performing oral sex. Douglas' spokesman Allen Burry said his client was only discussing what causes oral cancer during his interview with The Guardian.
Keaton most recently appeared in The Big Wedding that also starred Robert De Niro, Susan Sarandon, Amanda Seyfried, Katherine Heigl, and Robin Williams.
Teddy bear: Diane and Sterling shot a scene with the bigged stuffed animal
Romantic comedy: Michael portrays a selfish real estate agent who must take care of a granddaughter he's never known