For added mirth, she remixed some of the song's lyrics to reference Davidson's relationship with Kardashian.
At one point Cyrus left the stage to stand over Davidson, who was sitting on a chair next to Fallon.
"Pete Davidson, how you gonna do this to me?" she sang.
"It should have been me. In that Lamborghini leaving that nice a** restaurant."
Cyrus followed it up with the lyric: "I wanna watch a movie in frickin' Staten Island. It should have been me."
Cyrus' call-out of Davidson's relationship with Kardashian saw the comedian burst out laughing and turn red.
Cyrus' lyric-change appears to have been in reference to Kardashian and Davidson being spotted at Los Angeles restaurant Giorgio Baldi last month.
The couple were photographed wearing matching trucker hats exiting the eatery in Davidson's black Lamborghini.
Davidson and Kardashian were first linked together in October when they were spotted holding hands at a theme park but sources claimed they were "just friends".
They met when Kardashian guest-starred on an episode of Saturday Night Live together.
While the couple have dodged questions about their relationship, people close to them say they are happy together.
"They're still getting to know each other and want as little pressure as possible. They're trying to keep it under wraps," a source told Page Six.
"They're dating. There's no formal title. They're dating and getting to know each other — still figuring it out."
An insider also told E! News Kardashian is "completely enthralled" by Davidson who "makes her laugh the entire time they are together".
While they have posted about each other on social media both Kardashian and Davidson appeared on rapper Flavor Flav's Instagram account celebrating his birthday in matching pyjamas.
Kardashian is in the process of getting divorced from husband Kanye West after six years of marriage. The former couple share children North, 8, Saint, 6, Chicago, 3, and Psalm, 2.
Davidson has a string of famous exes including Ariana Grande, Kate Beckinsale and Kaia Gerber.
He most recently dated Bridgerton star Phoebe Dynevor earlier this year before the couple split because of distance.
