State Judge Bob Morrison dismissed the case on First Amendment grounds, ruling there was no evidence Stone and Time Warner Entertainment intended to incite violence.
The case was brought by the family of Louisiana store clerk Patsy Byers who was shot and paralysed in 1995 in a rampage by Sarah Edmondson and her boyfriend Ben Darras.
Edmondson and Darras told investigators they were inspired by Natural Born Killers, which they had watched repeatedly.
The 1994 movie starred Woody Harrelson and Juliette Lewis, as two young lovers who commit numerous robberies and murders during a wild three-week spree.
It hit many headlines on its release for its graphic depiction of violence.
Family to appeal
Edmondson, who was captured in a surveillance video firing a bullet into the clerk's neck, is serving a 35-year prison sentence for the crime.
Darras is serving a life sentence for the killing of a Mississippi man during the same crime spree.
Ms Byers died of cancer two years after the attack.
Her family's lawyer, Joe Simpson, said the makers of the film "knew it was violent and directed at young people", and that he will appeal against the judge's decision.
But lawyers for Stone and Time Warner said the movie was protected by the constitutional right to free speech.
Lawyers' defence
Time Warner lawyer Walter Dellinger said: "This decision makes clear that the work of artists is protected by the First Amendment.
"Artists do not have to be looking over their shoulders at litigation when they are doing their work."
Stone's lawyer, David Wood, said the judge's ruling showed that the lawsuit should never have been filed.
"Oliver Stone did not cause Patsy Byers to be shot," Wood said.
"It was Sarah Edmondson that shot Patsy Byers."