The footage shows a group wearing orange overalls, being forced to the ground and then decapitated.
It was posted online by Libyan jihadists who say they are allied with IS.
Egypt's president had earlier this week offered to airlift Egyptian expatriates out of Libyan territory.
The kidnapped Egyptian workers, all Coptic Christians, were seized from the coastal town of Sirte in eastern Libya, now under the control of Islamist groups.
On Friday, IS released pictures of the Egyptians, saying they had been kidnapped to avenge the fate of Muslim women "tortured and murdered by the Coptic church of Egypt".
Egypt's government has warned people not to travel to Libya, but many go there looking for work.
There had been demonstrations in Egypt calling on the government to do more to secure the release of those held.
Estimates as to the number of Copts living in Egypt today range from about nine million to 15 million out of a total population of about 87 million.
CREDIT: bbc
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