Some of the replies of the posters here seem to indicate how indoctrinated some have become.
Vincent, there are somethings you need to understand about homosexuality. First, let us assume for the sake of argument that it has some grounding in genetics. But our genetic dispositions on preference CAN always be conditioned by our environment and our wills. We are given free-will. This is why a person who has a genetic predisposition toward anger, after learning it is bad, they can adjust to function as normal human beings. Bottom line here is that our genes and feelings don’t determine who we are. WE determine and can change our feelings and preferences overtime. For some, this mastery over ones senses happens very quickly (as long as they have not entertained and nurtured their preferences too much). Some of these individuals even go on to lead normal married lives. Others, rightly, choose to live celibate as they continue to fight their inclinations.
The reason why “every one is gay once in awhile” in our society is because nothing is ever prohibited (other than murder of a already born human being (but even that is changing with euthanasia)). So any feeling or inclination is allowed to blossom and is encouraged. “Be yourself” is the motto of our culture. It fails to forget the effects of original sin on humanity. Even as Christians, though the guilt of original sin are wiped clean by Baptism, the effects are not. But we are offered much grace to resist our sinful inclinations.
All of this should show you why you need to get help for your sister. You have to explain to her why we are not just our feelings and preferences or our genes. Your whole family should be their for her to help fight her inclinations. It is sad that your sisters relationship with this other girl has continued for so long. It only makes it harder for her fight them now. But as a Christian, it is your duty to make sure you explain to her why she must start abandoning this lifestyle.
If it is God’s will, then she may even win over her inclinations and one day lead a normal married life. Or she may continue to struggle with it till the end of her life and lead a celibate life. But giving in to it is not an option. You need to make sure she understands that.
Also, since she is still 16, the parents have a moral right to know. That is their child and they should be informed of such a grave issue. You have not promised to keep these things silent and neither is there some sort of confessional seal on you. So unless your parents are known to be mentally incompetent or something of that sort, you have an obligation to inform them about this.
But the fact that she found it easier to confide in you than her own mother or father does raise some red flags on the relationship between your parents and her. That is unfortunate to begin with. Nevertheless, please don’t fall in to this mentality that “Oh she is gay, I will just respect that”.