The 20-year-old stood fourth following her first run but posted a track-record time of one minute 9.90 seconds in her second. That left Vathje with a two-run time of 2:20.42, just behind Austrian winner Janine Flock (2:20.34).
Laura Deas of Great Britain was third in 2:20.58.
"It is truly amazing. I'm coming off a neck strain (suffered during training in Altenberg), and was cleared to be able to slide so I am so excited to come out of here with a silver medal," said Vathje. "My equipment was a huge key today, and having my entire coaching team of Richard Bromley, Charles Wlodarzack, and Ivo Palkans at this race was truly a difference maker."
"This medal was what I needed. I had struggled so much in Altenberg and this gives me some peace knowing that I can slide and compete on European tracks."
Calgary's Lanette Prediger, 35, finished a career-best fourth in 2:20.58. Jane Channell, of North Vancouver, B.C., was seventh in 2:21.12 despite driving over a tree branch during her second run.
Martins Dukurs of Latvia captured the men's event. his fifth win in six races, finishing 0.60 seconds ahead South Korean of Yun Sungbin. Russian Nikita Tregybov, 19, was third, 1.19 back.
Calgary's Evan Neufeldt was eighth, tying the best result this year for a Canadian man. He posted a time of 2:18.24.
"It is seriously a winter wonderland here and I couldn't be happier with my first trip to St. Moritz," he said.
Dave Greszczyszyn, of Brampton, Ont., was 13th at 2:18.56 while Calgary's Barrett Martineau finished 22nd.
With files from The Associated Press