The actor, now 30, donned a vinyl halter-neck corset with silver buttons down the front, paired with matching shorts with white trim, inspired by the 38-year-old singer's costume in the 2007 track's music video, and the actress, now 29, was "smitten".
Zendaya "fell hard for him" after watching the now viral act, a source told The Mail on Sunday.
"It's not just sexy, but it shows how amazingly talented he is. It takes a lot of confidence for a straight guy to pull off drag," they said.
"When he was announced as Spider–Man, people were taken aback because he's slightly wimpy. But what he lacks in stature he more than makes up for in talent."
Zendaya faced off against Tom on Lip Sync Battle in 2017, as part of promotion for their film that year, Spider-Man: Homecoming.
And she laughed after watching him perform, with the source saying: "You can see the shock on her face, but then the admiration. I'm sure it's something they will show their kids one day."
Zendaya performed renditions of 40-year-old Bruno Mars' 24K Magic and 55-year-old Erykah Badu's Tyrone.
Earlier this year, Zendaya's 47-year-old stylist, Law Roach, suggested that she and Holland got married in private during an appearance on the red carpet at the Actor Awards in Los Angeles on March 1.
"The wedding has already happened. You missed it," he told Access Hollywood.
When asked if that is "true", Law replied: "It's very true!"
And in June, Holland finally confirmed that he and Zendaya tied the knot, after revealing his grandmother thought that she hadn't been invited to the ceremony because she had seen the infamous fake AI wedding pictures that circulated online.
Asked by Esquire magazine if he had to send out similar messages to other family members who feared they may have missed the wedding, Holland said: "No, because they were all there."
However, The Odyssey star - who wants to keep his relationship with Zendaya private - refused to divulge any further details about the wedding.
"That's all you'll get on that," he said.
Holland and Zendaya met on the set of Spider-Man: Homecoming a decade ago.
Their relationship was not confirmed publicly until 2021 when they were pictured kissing.
The couple confirmed their engagement in September 2025 when Holland referred to Zendaya as his "fiancee" during a panel event.