By Michelle Tauber
March 28, 2011 12:00 PM

Stepping out as a single lady for the first time in more than three and a half years, Jessica Biel showed no hint of the post-breakup blues. Smiling wide and flaunting her figure in form-fitting jeans and a white T-shirt, the actress, 29, hit L.A.’s Cafe Entourage on March 12, where she threw a 26th-birthday party for her brother Justin. Although she and Justin Timberlake had announced the end of their relationship just three days earlier, Biel, says an observer, appeared “in great spirits.” And maybe a little relieved. Says a friend of Timberlake: “I think they’re both happy the drama is over.”

In fact, the split came as little surprise to those in the pair’s inner circle-many of whom told PEOPLE that the romance was frequently a rocky one. “Their entire relationship, once they got past the honeymoon stage, was a roller coaster of ups and downs,” says a mutual friend of the couple. Recently raising eyebrows: the clear chemistry between Timberlake, 30, and Mila Kunis, 27, who costar in the upcoming romantic comedy Friends with Benefits. A Timberlake source says Kunis had nothing to do with the breakup: “Justin always gets accused of being associated with practically every female that he has worked with, and there’s no truth to it. He has never cheated on her.” For Biel’s part, “she always wanted to turn a blind eye,” says the friend close to both stars. Adds a Biel source: “There was never any proof.”

With both Timberlake and Biel working on films, “they spent a good deal of time apart,” adds the friend. But beyond the long-distance challenges, the pair-who had quietly taken “breaks” over the course of their romance-may have had diverging priorities. Coming off his critically lauded performance in The Social Network, “Justin’s focus on acting really kept him busy,” says the friend. “She put more of a priority on the relationship. She was really invested-her heart was in it.” And Justin? “This was definitely a real relationship for him,” says the Timberlake source. “He’s always been supportive of her.” And yet, adds the mutual friend, “he was desperately trying to do what he could to make it work. When you have to ‘try’ that hard at something, you start to realize it might just be time to part ways.”

Despite rumors that Biel was pushing for a wedding, “there was no ring shopping … she’s not ready to get married,” says a source close to the actress. Seconds a Timberlake source: “The topic of marriage wasn’t the catalyst or final straw that broke up the relationship. It’s hard for both of them, but they made a mutual decision.” Another Timberlake pal offers a different view, saying, “Justin was dying to be single and have fun. He was torn, because Jess is an amazing woman and considered to be ‘marriage material,’ and he loved that about her. But he couldn’t drag her along just because one day in the far future he’d want to marry her. It was making her crazy, and it was making him hate himself.”

Now that they’re going their separate ways, Biel “is doing surprisingly well,” says a source who knows her. As for Timberlake, “This is upsetting for him,” says the source close to him. “He doesn’t walk away from relationships easily-especially this one. He will always care about her.” But, adds the source: “They decided their relationship ran its course and it was time to move on.”