The nude photo emerged hours after Sarah, once a teenage beauty queen in her home state of Alaska, was named as Republican John McCain's running-mate.
Slideshow: Click here to see the REAL Sarah Palin files
Hundreds of websites and blogs in the USA picked up the pic, describing it as the real deal.
But Palin's camp last night poured cold water on the speculation and a spokesman for her team told the News of the World it was definitely a FAKE.
Other forged snaps of the 44-year-old governor - who married her high-school sweetheart Todd and now has four kids - have also fuelled the frenzy on the net since the relative unknown was pushed into the Presidential spotlight.
The gun-toting mom's looks have won her legions of admirers in Alaska, where bumper stickers proudly proclaim: "Coldest State, Hottest Governor".
If McCain, 72, takes the election in the tight-run race on November 4, Sarah will be just a heartbeat from being new commander-in-chief.
So let's all hope she doesn't set HIS pulse racing.