"According to preliminary information, 11 bandits have been neutralised," Russia's national anti-terrorism committee said in a statement quoted by TASS news agency.
"All of them were participants in an armed gang whose members swore loyalty to IS."
The fighters opened fire on law enforcement officers and threw grenades after they were cornered in a wooded area outside the city of Nalchik in the Kabardino-Balkaria region, the anti-terrorism committee said.
The security operation has now ended, authorities said.
Earlier this month, Russia said it had killed the supposed head of an IS-linked gang in Kabardino-Balkaria, saying he vowed allegiance to IS this spring and organised the murders of several officials, gunning down one in front of his son.
Kabardino-Balkaria is seen as one of the more peaceful parts of Russia's North Caucasus.
Islamists in the North Caucasus have previously been united under a local Caucasus Emirate organisation, but are now increasingly flocking to Islamic State, which in June declared it had established a franchise there.
IS claimed responsibility for the bombing of a Russian passenger jet last month that killed all 224 people on board, prompting Russia to intensify its strikes against the group.
President Vladimir Putin has estimated that there are between 5,000 and 7,000 people from former Soviet countries fighting with IS.
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