Mussab Elian was sentenced to 10 years in prison for belonging to IS and conspiring to commit an attack, while Samir Abed Rabbo received nine years.
Both are from the Palestinian neighbourhood of Sur Baher in Israeli-annexed east Jerusalem.
Israel added IS to its list of terrorist organisations in October 2015.
Elian went to Jordan in 2015 with the intention of crossing the border into Syria to join the jihadist group but was arrested by the Jordanian authorities and deported him to Israel, the ruling said.
IS has yet to claim any attack in Israel but authorities insist the threat exists.
Several Arab Israelis, the descendants of Palestinians who remained on the land after the creation of Israel in 1948, have been arrested in recent months by Israeli authorities who accuse them of links with IS.
Israeli intelligence services say around 50 Arab Israelis have gone to fight with the jihadist group in Syria and Iraq.
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