Some Libyan affiliates of the IS circulated a video purporting to show the beheading of the Egyptians, according to a Xinhua report. The Egyptian foreign ministry has not commented on the video yet.
The Egyptians were abducted in the Libyan city of Sirte in two separate incidents in December and January, only a week apart from each other.
Part of Sirte is now controlled by the IS affiliate in Libya. A group of gunmen took control of two radio stations in Sirte, and aired statements of the IS, local residents said on Friday. The local council and a hospital also fell into IS hands.
Libya is now locked in a fight between the pro-secular army and Islamist militants. The turmoil makes an ideal hotbed and recruiting ground for terrorism.
Egyptians were abducted in the Libyan city of Sirte in 2 separate incidents
On Jan 27, an IS affiliate in Libya targeted the biggest hotel in capital Tripoli, killing nine people and injuring dozens.
Earlier in December, armed groups claiming loyalty to the IS also set up bases in the eastern city of Derna.
Libya has been mired in chaos and civil war since October 2011, when the North Atlantic Treaty Organisation (NATO) began supporting anti-Gaddafi rebels, ultimately resulting in the toppling of the Gaddafi regime.