The picture is among several recovered by Kurdish soldiers from the mobile phones of dead fanatics in the Syrian town of Kobane.
It shows the child being pinned to the floor, in clear distress as a knife is held to her throat.
It is feared she may have been beheaded along with her family for being an Alevi Muslim, a branch of Islam whose followers have been targeted by IS.
Other pictures show beheadings and jihadis playing football with the severed heads of victims.
The photo of the girl is believed to have been taken on Friday. There were no shots of her decapitation and her body has not been found, leading some to hope she had a miraculous escape.
The many fighters who have circulated the picture on Facebook have nicknamed her ‘Melek’, meaning angel.
A source who reportedly obtained the picture from YPH soldiers said:
“Each time I look at this picture it makes me weep. You can see how frightened she is. I can almost hear her scream. What kind of depraved monsters are they? What pleasure can killing this child bring anyone?”
“The people of Kobane are desperate for the world to see with their own eyes the atrocities inflicted by these filth,” he added.
According to eye witnesses the baby, a woman and an older child were witnessed being dragged out of hiding by ISIS around the time of an air strike. There were no shots of her decapitation and her body has not been found, fuelling hopes that the child and her family might yet be safe.
“Some have a flicker of hope in their hearts that they might have escaped,” said Ali.
Earlier, Isis militants released images of the public crucifixion of a teenage boy. The barbaric punishment took place over three days in the central square of the extremists’ de facto capital Raqqa. The militant group accused the teenager of taking photographs of the terror group’s headquarters in Syria.