Passing sentence the court said Xue received documents on geological conditions of onshore oil wells and a database that gave the coordinates of more than 30,000 oil and gas wells belonging to China National Petroleum Corporation and its subsidiary PetroChina Ltd.
That information, it said, was sold to IHS Energy, the US consultancy Xue worked for.
Call for release
The sentence of eight years is close to the recommended legal limit of 10 years for all but extremely serious violations.
Jon Huntsman, the US ambassador to China, attended the hearing to display Washington's interest in the case, but left the court without commenting after the verdict was announced.
The US embassy later issued a statement calling for Xue's immediate release and deportation to the United States.
Xue's sentence is likely to alarm foreign businesses operating in China unsure when normal business activities elsewhere might conflict with the country's vague state security laws.
Chinese officials have wide authority to classify information as state secrets, while draft laws published in April said business secrets of major state companies qualify as state secrets.
John Kamm, an American human rights campaigner who worked with the US State Department to lobby for Xue's release, said the Monday's verdict was harsh and would be unsettling for foreign firms working in China.
"It's a huge disappointment and will send very real shivers up the spines of businesses that do business in China."
In March another Chinese-born foreign national, Australian Stern Hu, an employee of global mining firm Rio Tinto, was sentenced to 10 years for bribery and infringing trade secrets that dealt with iron ore sales to Chinese companies.