The youths were killed in January 2005 in the country's southeast by Turkish soldiers who claimed they were militants with the outlawed Kurdistan Workers' Party (PKK) who had opened fire on them.
The victims were a 24-year-old mother of three, three girls aged 13, 15, and 16, and a 22-year-old man.
The Strasbourg-based European Court of Human Rights (ECHR) ruled that Turkish authorities had failed to prove claims the youths had been armed and that a proper investigation had not been carried out into their deaths.
"The government failed to show to the court's satisfaction that the resort to the use of fatal force... Had been absolutely necessary and proportionate," the court said.
The court ordered Turkey to pay 65,000 euros to the parents for each of the victims, as well as 5,930 euros in court costs and expenses.
Turkish investigators had claimed the youths fired on a group of 26 soldiers patrolling in the mountains of southeastern Turkey, where the PKK was carrying out at an armed rebellion.
Their version of events was subsequently confirmed by investigators, with the youths dubbed "PKK terrorists".
The European court said the investigation was flawed, noting that weapons found next to the bodies of the youths were not checked for fingerprints. Their clothes were also not checked for gunpowder residue and in some cases were destroyed before the investigation was underway.
It said there was no convincing evidence that the youths had been armed or had fired on the soldiers, noting also that no Turkish servicemen were injured in the gun battle, which was said to have lasted two hours.
Kurdish rebels announced in April that they would begin withdrawing from Turkey as part of a new peace drive between Ankara and jailed Kurdish leader Abdullah Ocalan.
In another ruling today, the court also ordered Turkey to pay 19,500 euros in compensation to a 59-year-old man who was shot in the leg in 2005 and left partially disabled by soldiers who mistook him for a PKK militant.
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