Lohan learned the result of the test on Thursday's edition of TV's "Trisha Goddard" chat show.
Kristi Horn has long named Lohan as the biological father of her daughter. Lohan was married to Dina Lohan from 1985 to 2007, but they separated several times. They have four children, including troubled actress Lindsay and aspiring model Ali.
Michael and Lindsay have been in the news in recent years for their family disputes, substance abuse issues and brushes with the law.
Michael met Ashley for the first time on the TV program.
When Goddard asked who wanted to open the DNA results envelope, Ashley volunteered, saying, "I'll do it; it's my life," to which Michael added, "It's all of our lives."
Kristi cried as she read the result, while Ashley remained silent.
Goddard looked at the paper and announced, "Michael is Ashley's father."
Ashley then handed the envelope to Michael and said, "Just to prove to you." Michael responded by saying, "I believe what you said."
Kristi then told Michael, "You have another daughter and you missed out on 17 years of her life."
Michael attempted to hug Ashley, but she resisted, explaining, "This is the first time I've met you, I'm sorry, but I'm not sure."