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.
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.
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.