The Islamic State militants released the video on Tuesday. Sotloff is the second American journalist to be executed by ISIS in two weeks.
"The US intelligence community has analysed the recently released video ... and has reached the judgment that it is authentic," said Caitlin Hayden, the spokeswoman for the National Security Council.
"We will continue to provide updates as they are available," CNN quoted Hayden as saying.
In the video, Sotloff kneels in the desert, dressed in an orange prison-style jumpsuit. A masked "executioner" lords over him, wielding a knife.
ISIS blames President Barack Obama's decision to conduct airstrikes against the militant group in Iraq for the killing.
The Islamic State has thrived and mutated during the civil war in Syria. It swept into Iraq in June, seizing large swaths of the country's Sunni-dominated northern and western provinces.
Obama ordered targeted airstrikes in Iraq to begin in early August after ISIS fighters began targeting ethnic Yazidis and launching attacks toward the Kurdish regional capital of Irbil.
Condemning the killing of Sotloff, Obama said his murder is "horrific act of violence" by militants.
He said the US will not be intimidated by Islamic State militants and will build a coalition to "degrade and destroy" the group.
A video of another journalist, James Foley's execution was released last month.
The executioner appears to be the same person. The location of the two killings also appears to be similar.
"I'm back, Obama, and I'm back because of your arrogant foreign policy towards the Islamic State," the executioner says in the second video. "Just as your missiles continue to strike our people, our knife will continue to strike the necks of your people."
At the end, the video threatens the life of a British captive, just as the Foley video threatened Sotloff's life.
The SITE Intelligence group says there's no question the same masked fighter appears in both videos.
Following Foley's death, the British ambassador to the United States said that experts in his country were close to identifying his killer. He has not yet been named.