"Blade Runner" Pistorius could now be sent back to jail for at least 15 years for shooting Steenkamp dead on Valentine's Day 2013.
The athlete is expected to be sentenced for the new murder conviction by a lower court at a date still to be determined.
Last year a judge gave Pistorius a five-year jail sentence for "culpable homicide" of Steenkamp, but prosecutors argued that he should be convicted of murder for firing four shots through a locked toilet door in a case that attracted interest around the world and continues to fascinate and divide South Africa.
Pistorius left jail on parole in October and is meant to serve the rest of his sentence under house arrest.
"This is a human tragedy of Shakespearean proportions," Judge Eric Leach said as he started reading the ruling.
State prosecutors who lodged the appeal say Pistorius intended to kill Steenkamp and that she fled to a toilet during a row. Pistorius denies deliberately killing Steenkamp, saying he mistook her for an intruder at his home.
At the original trial in September last year, Judge Thokozile Masipa ruled that the state had failed to prove intent or "dolus eventualis", a legal concept that centres on a person being held responsible for the foreseeable consequences of their actions.
RELATED READING:
Oscar Pistorius starts community service
Dolus eventualis refers to whether a person foresees the possibility that his or her action will cause death but carries on regardless.
"In these circumstances, the accused must have foreseen and, therefore, did foresee that whoever was behind the toilet door might die but reconciled himself to that even occurring and gambled with that person's life," said Judge Leach.
"The identity of his victim is irrelevant to his guilt."
RELATED READING:
Steenkamp's mother says wants no revenge against Pistorius
Steenkamp's father 'relieved' after judgement
The father of the slain model says he felt a sense of "relief" after South Africa's appeal court found that Pistorius was guilty of murdering Reeva.
"It's a big relief. I feel it's a fair decision that the judge gave," Barry Steenkamp said in a brief interview on local
television station ANN7, before breaking down in tears.
Meanwhile the Pistorius family said it would wait for guidance from lawyers after the appeals court ruled against him.
"The legal team will study the finding and we will be guided by them in terms of options going forward. We will not be commenting any further at this stage," Anneliese Burgess, the Pistorius family's spokeswoman said in a statement.
(Writing by James Macharia)
