The suit filed Wednesday in Superior Court concerned the tabloid's May 23 issue, which featured a photograph in which Diaz and Shane Nickerson, an MTV producer who works on her reality show, "Trippin," were shown outside a Los Angeles sound studio.
The story's headline: "Cameron Caught Cheating."
Diaz, Nickerson and others had walked out of the studio and stopped to exchange goodbye hugs, but "she and Nickerson did not engage in any kissing or making out," according to the suit.
"We fully stand behind the reporting of the story and we will defend the lawsuit aggressively," said Stu Zakim, spokesman for American Media, which publishes The National Enquirer.
Nickerson and his mother-in-law, Jeanne Martin, a Connecticut schoolteacher, are also plaintiffs in the suit.
Martin said she was "emotionally and physically distraught" after a National Enquirer reporter pulled her away from her class and asked for her response to Nickerson leaving her daughter for Diaz.
The suit seeks more than $10 million each for Diaz and Nickerson, as well as unspecified damages for Martin.