Specialist James Barker was yesterday told he must serve 20 years before he could be considered for parole.
The 23-year-old - one of four US soldiers accused over the rape and killings - pleaded guilty and agreed to give evidence against the others to avoid the death penalty.
Lieutenant Colonel Richard Anderson, the military judge presiding over the case at a military court in Kentucky, told Barker: "This court sentences you to be confined for the length of your natural life, with the eligibility of parole."
The rape of Abeer Qassim al-Janabi and the killings happened in Mahmoudiya, a village around 20 miles south of Baghdad. They are among the worst in a series of alleged attacks on civilians and other abuses by military personnel in Iraq.
Barker told investigators that, on March 12 this year, the soldiers - from the 101st Airborne Division - drank whiskey mixed with an energy drink and played cards as they planned the attack on the girl and her family.
He said that he, former Private Steven Green and another soldier, Sergeant Paul Cortez, had taken turns to rape the girl, and said Mr Green shot her, her parents and her six-year-old sister.
Mr Green, charged in a civilian court with rape and murder, has pleaded not guilty. Sgt Cortez, charged with rape and murder, has deferred entering a plea.
On Wednesday, Barker confessed to the crimes as part of a plea agreement requiring him to give evidence against the other accused. He showed no reaction when his sentence was read out yesterday.
Earlier, he had wept during his closing statement. He accepted responsibility for the rape and killings, saying the violence he had encountered in Iraq left him "angry and mean" towards Iraqis.
"I want the people of Iraq to know that I did not go there to do the terrible things that I did," Barker said. "I do not ask anyone to forgive me today.
"To live there, to survive there, I became angry and mean. I loved my friends, my fellow soldiers and my leaders, but I began to hate everyone else in Iraq."
After Barker's sentencing, military prosecutors declined to comment because three other soldiers have yet to be tried in the case. The sentence, which is subject to review by a higher military authority, could be reduced.
During evidence intended to show the judge that Barker could be rehabilitated, his fellow soldiers described weeks with little support and sleep as they manned checkpoints.
Captain William Fischbach, the lead prosecutor, told the court that such conditions were no excuse for Barker, who led the group of soldiers to the family's house, and said no one deserved to suffer the horrors inflicted on the teenage girl and her family.
"This ... 14-year-old girl never fired bullets or lobbed mortars," Capt Fischbach said as he held photographs of the victims. "Society should not have to bear the risk of the accused among them ever again."
The defendants are accused of burning the girl's body to conceal the crime. Authorities had believed the family had been killed by insurgents until a member of the military unit involved came forward.
Mr Green's involvement has raised questions about the army's recruiting procedures in an increasingly unpopular war that has killed nearly 3,000 US troops.
He entered the army soon after being arrested for underage drinking, and had a record of alcohol and drug abuse.
To make up for a recruitment shortfall, the army has begun accepting a higher number of "category four" candidates who score low on a military aptitude test.
The charges:
Specialist James Barker
Convicted of rape and murder.
Sergeant Paul Cortez
Charged with rape and murder. Deferred entering a plea; trial date yet to be set. Could face death penalty.
Private Jesse Spielman
Charged with rape and murder. Barker did not name Pte Spielman as a participant in the rape and murders, but said he had been at the house when the assault took place and had come knowing what the others intended to do. Pte Spielman is to be brought before a court in December, and could face the death penalty.
Private Bryan Howard
Charged with rape and murder. Barker did not say Pte Howard was a participant in the rape and murders. Prosecutors yesterday said Pte Howard had been left behind at a checkpoint. He is yet to enter a plea, and is not facing the death penalty.
Former private Steven Green
Charged in a civilian court with murder and sexual assault, and has pleaded not guilty. He was discharged from the army before the charges. It is unclear whether the death penalty would apply.
