The 19-year-old could make his debut for the club against Maidstone United on Saturday.
King recently spent time on loan at National League South outfit Bishop's Stortford.
"This is the next step up for Craig at an excellent standard of football, just one league below us," Luton manager Nathan Jones said.
Southport have released goalkeeper Mason Springbourne as a result of King's arrival.
"He deserves to be an established number one at a club," Southport boss Andy Preece said.
National League side Southport have signed Luton Town goalkeeper Craig King on an initial one-month loan deal.