The peak rises more than 12 miles from the floor of a huge impact crater at the asteroid's south pole, taller than Hawaii's Mauna Kea, Earth's highest mountain when measured from its bottom on the sea floor.
That puts it behind only the giant Martian volcano Olympus Mons in terms of height.
The peak hasn't been named but the crater it sits in is named Rheasilvia, after the mythological mother of the twins who founded Rome, ScienceNew.org reported.
The new observations come from NASA's Dawn spacecraft that has been orbiting the asteroid since July.
Dawn mission principle investigator Chris Russel says he now considers Vesta the smallest terrestrial planet in the solar system.
"Like Earth, Mars, Venus and Mercury, Vesta has an ancient basaltic crust, lava flows going across the surface, and it also has a large iron core," he said. "It has tectonic features, like on Earth: rift valleys, ridges, cliffs, hills and a giant mountain."