A black-clad figure with a knife, standing in a barren landscape along with two kneeling men wearing orange clothing, said the Japanese public had 72 hours to pressure their government to stop its "foolish" support for the US-led coalition waging a military campaign against ISIL.
The militant, who spoke in English, demanded "200 million" without specifying a currency, but an Arabic subtitle identified it as US dollars, Reuters reported.
The footage named the men as Haruna Yukawa and Kenji Goto.
The video was not dated, but on a visit to Cairo on Jan. 17, Japanese Prime Minister Shinzo Abe pledged around $200 million in non-military assistance for countries battling ISIL.
Abe, speaking in Jerusalem on Tuesday towards the end of a six-day tour of the Middle East, said ISIL's threat to the two purported captives was "unacceptable".
"We strongly demand the release of the Japanese citizens unharmed," Abe said. "The international community needs to respond firmly and cooperate without caving into terrorism."
The video resembled others distributed by ISIL outlets in which captives were threatened or killed. It appeared to be the first time that an ISIL video specifically demanded cash for captives.
In Tokyo, Japan's foreign ministry said it was checking the video to see whether the footage was genuine.
Cabinet ministers in Tokyo announced that they were meeting to discuss the government's response to the militants' threats.
Goto is a freelance reporter who was based in Tokyo. He has written books on AIDS and children in war zones from Afghanistan to Africa and reported for news broadcasters in Japan.