The discovery on Thursday of the girl, apparently unharmed, heightened the drama around a mysterious shooting rampage that left four adults dead and a seven-year-old girl hospitalized with bullet wounds and skull fractures.
The reason for the killing, in a wooded area near the village of Chevaline, remains unclear.
All were found in or near a BMW that prosecutors say belonged to a British family vacationing at a campground on the shores of Lake Annecy, a popular retreat in the French Alps. The owners of the campground told investigators the victims included two parents and a grandmother.
A cyclist stumbled across the scene on Wednesday, and police arrived to find a man's body in the front seat and two women in the back, and a dead cyclist with no known ties to the other victims nearby.
The driver of the car was identified as Saad al Hilli, a British citizen from a London suburb who was born in Baghdad in 1962 and the dead biker was identified as Sylvain Mollier, a father of three from nearby Grenoble.
Britain's Sky News cited al Hilli's neighbour George Aicolina as saying that he was an engineer who was "very much in love with his two girls."
The seven-year-old girl, believed to be the four-year-old's sister, was discovered near the car beaten with bullet wounds in her shoulder, Annecy prosecutor Eric Maillaud said. She is now in a medically induced coma but her condition is stable, he added.
French authorities struggled to explain why the four-year-old was not discovered earlier and was left for hours alone on the back seat of a car with two corpses, apparently those of her mother and grandmother.
Maillaud said, "we discovered a little four-year-old girl that no one noticed earlier because she wasn't moving. Probably terrified, she was completely immobile among the bodies." She was later examined and is well.
Maillaud said as soon as investigators opened the door, the girl emerged, smiled and reached out her arms; she was speaking English but couldn't describe what had happened. She was taken into police care.
The man who discovered the bodies alerted authorities on Wednesday afternoon; the car was under guard until midnight, when special investigators arrived from the Paris area.
"Firefighters, technicians, doctors looked inside the car through the windows but they didn't see the little girl. The child, terrorized, never moved. She stayed beneath her mother's legs," Lt. Col. Benoit Vinnemann said, according to BFM-TV.
Investigators exploring motives
The prosecutor said they were looking at all possible motives and are protecting the girls in case the killers are still on the loose and want to "get rid of" witnesses to the killings.
Three of the four victims were shot in the head, and the fourth victim remains in the car pending further investigation, Maillaud said.
He said the bodies will be autopsied on Friday.
Britain's Foreign Secretary William Hague said there had been a "terrible, tragic shooting in France," in a message posted to his personal Twitter account.
"Our thoughts are with the young girls who survived and the family," he wrote.