The 29-year-old shooter, Markus Kaarma was taken into custody on Sunday after Montana police found the victim with a gunshot wound to his head.
"Initial reports indicate that the male resident encountered an intruder in his garage after an alarm went off, and subsequently shot him with a shotgun," police sergeant Travis Welsh said.
Diren Dede, of Hamburg, Germany, was studying at Big Sky High School in Missoula, where he played for a soccer team.
Kaarma appeared in court and was charged with deliberate homicide.
If convicted, he faces a minimum of 10 years and up to 100 years in state prison. Acting Justice of the Peace Suzanne Geer set bail at $30 000.
Defence lawyer Paul Ryan said Kaarma and his common law wife, Janelle Pflager, had been robbed twice in the previous three weeks and had installed screen surveillance and motion detectors. They have a 10-month-old son.
Mindset of revenge
The two were on their couch, watching television, when an alarm sounded. "They had no choice in their mind other than to confront the intruder," Ryan said.
Ryan said Kaarma felt terrible about killing Dede. "It wasn't his intent to even kill," he said. "It's really tragic, there's no question."
Dede's host family lived in the same neighbourhood as Kaarma, according to Deputy County Attorney Andrew Paul.
Paul said Kaarma fired four distinct shots, covering the entire back wall of the garage with his shotgun.
"He was just shooting in the dark," Paul told AFP.
Paul wouldn't confirm that a second person had been with Dede on the night of the shooting, but noted that a friend had suggested the exchange student had entered the garage looking for something to drink.
Prosecutors accused the defendant of having a mindset of revenge. Paul cited a witness who alleges that Kaarma issued threats at a hairstyling salon on 23 April.
The hairstylist, Felene Sherbondy, quoted Kaarma as saying: "I'm just waiting to shoot some fucking kid," according to the prosecution's affidavit.
Missoula County Schools Superintendent Alex Apostle called the shooting a tragedy. "We are all pulling together to support the students, staff and families of Big Sky High School," he said.
The Council on International Educational Exchange, which organised Dede's stay, sent representatives to Montana, to meet with all parties and provide support. The student's family was also expected in Missoula in the coming days.
Ryan said he expected his client to plead not guilty at the preliminary hearing set for 12 May.
He said he would invoke the so-called "Castle Doctrine," under which Montanans have the right to use deadly force to protect their homes if they feel threatened.
In 2012, Montana prosecutors decided not to charge a man who shot and killed another man in his garage.