Two teenage brothers were convicted of manslaughter in the killing of a 10-year-old Nigerian boy as he walked home from a London library
The suspects, Ricky Preddie, 19, and Danny Preddie, 18, who were cleared of murder in April, had denied the charges. They will be sentenced later.
Damilola's parents, Richard and Gloria, welcomed the long-awaited verdict from a jury at London's Old Bailey.
"It is a great comfort that justice has finally been done for Damilola," said a family statement, read by Richard Taylor on the courthouse steps. "We pray that his gentle soul can now rest in peace."
The maximum sentence for manslaughter is life imprisonment, but this is not mandatory and the court may grant the Preddies permission to appeal.
The Preddies were just 12 and 13 when Damilola was stabbed with a broken bottle and died in the stairwell of a run-down apartment block near his home in south London.
They were arrested a few days after the slaying, but released in the absence of sufficient forensic evidence.
The two brothers _ known to be prominent members of a local gang _ were arrested again in 2005 when a second forensic examination of clothing seized from the boys found spots of Damilola's blood and fibers from his school uniform.
Damilola's death was front-page news, and Prime Minister Tony Blair promised everything would be done to find the killers.
Public outrage erupted when four other youths under 18 were tried and acquitted of the murder in 2002.
The investigation was the first major test for the Metropolitan Police after its bungled inquiry into the racist murder of black teenager Stephen Lawrence. No one has yet been convicted of that killing.
Former commissioner Sir John Stevens once described the failure to catch Damilola's killers as one of his biggest regrets.
Deputy Assistant Commissioner John Yates said Wednesday's verdicts are cause for "quiet satisfaction that we have finally managed to achieve justice for the Taylor family."
A third defendant, Hassan Jihad, 20, was cleared of murder with the Preddies in April.
Killers are lawless savages
Brothers who terrorised streets since age of 10 and 11
Pair of monsters aged 12
Damilola killers had long criminal history
Brothers guilty of Damilola death
His killers were street children, fearless and brutal with no remorse