The Paralympian is facing jail after fatally shooting the law graduate-turned-model on Valentine's Day 2013.
He has been released on bail after being convicted of culpable homicide - the South African equivalent of the UK's manslaughter charge - ahead of sentencing on 13 October.
Judge Thokozile Masipa told the hushed courtroom: "Having regard to the totality of this evidence in this matter, the unanimous decision of this court is the following: on count one, murder ... the accused found not guilty and is discharged.
"Instead he is found guilty of culpable homicide."
On Thursday, on the first day of delivering her verdict, the judge criticised Pistorius for acting hastily when he shot Steenkamp.
She said: "If the accused, for example, had awoken in the middle of the night and in darkness seen a silhouette by his bed and in a panic shot at that figure, only to find it was the deceased, his conduct would have been understandable and perhaps excusable."
She added: "The accused had reasonable time to think, reflect and conduct himself.
"I'm not persuaded that a reasonable person with the same disability would have fired the four shots.
"The accused knew there was a person behind the toilet door, he chose to use a firearm.
"I am of the view the accused acted too hastily and used too much force. It is clear his conduct is negligent."
The athlete had earlier been found guilty of firing a gun in a busy restaurant, and not guilty of two charges of firing a gun through a sunroof and possessing illegal ammunition.
The double-amputee broke down in court on Thursday as he was cleared of two murder charges, but judge Thokozile Masipa had already hinted the 27-year-old may be convicted of a lesser charge of culpable homicide after describing his actions as "negligent" on the night she died.
On Friday, Steenkamp's father Barry leaned forward in his seat when the manslaughter verdict was read. Her mother, June, showed no reaction.
Members of Pistorius' family embraced the shamed athlete as Judge Masipa called for a short adjournment.
The judge also announced that Darren Fresco, whom Pistorius blamed for passing him a loaded gun in the packed restaurant, would not be prosecuted for his part in the incident.
Pistorius always admitted being responsible for Steenkamp's death at his home in Pretoria, but said he mistook his partner for intruders and fired four bullets from his 9mm pistol through the toilet cubicle.
The judge on Thursday dismissed prosecution claims that the double-amputee intentionally killed the 29-year-old, saying Pistorius could not be convicted of either pre-meditated or second-degree murder.
But she returned to court on Friday to convict him of culpable homicide and one gun charge relating to a restaurant shooting.
Pistorius stood with his hands crossed to hear the verdict but showed no emotion.
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In a trial that has gripped the world, Pistorius was known as a sporting superstar, while Steenkamp was a top model and law graduate. The pair had quickly established themselves as the Posh and Becks of South Africa.
But in one night, Pistorius was transformed from a global sporting icon to murder suspect after he killed Steenkamp by firing four hollow-point bullets through a toilet cubicle door in a bathroom at his Pretoria home.
Steenkamp, 29, suffered fatal injuries after she was hit in the head, arm and hip in a tragic end to a budding romance.
Interest in the subsequent case was intense, and a ruling that parts of the trial could be broadcast live on television added to the scrutiny.
While the prosecution led by Gerrie Nel - nicknamed The Bulldog for his courtroom tenacity - maintained that Pistorius planned to kill Steenkamp after an argument, the defence - headed by Barry Roux - argued the athlete mistook her for an intruder, and her death was a “huge, unfortunate mistake.”
But Nel painted an entirely different picture of Pistorius - a "deceitful witness", the athlete "dropped the baton of truth" and told a "snowball of lies," he said during proceedings.
Oscar Pistorius from Day One in court
Nel sought to depict the star as having a short fuse and being obsessed with guns, calling a former girlfriend who told the trial that the defendant once shot his gun out of the sunroof of a car.
His defence team, presented a case that portrayed him as anxious about crime and claimed evidence at the crime scene was mishandled.
Court proceedings opened in March with a witness describing how she heard "bloodcurdling screams" on the night of the shooting.
Michelle Burger, who lived on a complex close to the Silverwoods Estate gated community where Pistorius's home was located, said she was woken by the screams. "It leaves you cold," she told the court.
Some 21 witnesses testified for the prosecution and 16 for the defence. But Judge Masipa yesterday said she found discrepancies between the recollections of witnesses and phone records, and told the court she would be relying on the latter when making her decision.
Pistorius's reactions as the case against him was set out ranged from crying during evidence about texts they exchanged and vomiting at a description of her injuries to calmly taking notes and talking to his lawyers.
In June, after the trial was halted for a month, experts concluded that Pistorius was not suffering from mental illness at the time of the shooting.
The trial's tensest and most dramatic moments came in several days of highly charged testimony from Pistorius. His voice thick with emotion, the athlete began his evidence by saying sorry to Steenkamp's family.
Watched by the model's mother June, he said: "I was simply trying to protect Reeva. I can promise that when she went to bed that night she felt loved."