Isco worked under Ancelotti from 2013 to 2015 at Real Madrid and the Everton manager continues to be a big admirer of the midfielder.
It has been claimed that Everton are interested in signing Isco in the January transfer window, with Real Madrid prepared to sanction his exit for the right price.
But Ancelotti has played down claims that his team are interested in snaring away Isco in the upcoming window, with the Italian stressing that the rumours are propagated by the media and do not hold even a kernel of truth in them as far as the Merseyside giants are concerned.
The 61-year-old hailed his former charge as a fantastic player and insists that Everton have not yet got round to discussing the January window.
Asked about Everton being linked with Isco, Ancelotti told a press conference: “Isco is a rumour from the press.
“It is not a rumour that went out from our side.
“We are not talking about the market at the moment.
“He is fantastic player.
“He is a Real Madrid player.”
Ancelotti roped in Isco’s former Real Madrid team-mate James Rodriguez in the recent transfer window and the Colombian has earned plaudits for the way he has started life in England.