They have been ordered to be held for an additional 45 days for mimicking Islamic State militants in a video, according to International Christian Concern (ICC).
The four were taken into custody on 9th April after their parents handed them over following death threats and riots against other pupils, their families and Christians in their village.
The video, recorded on a school trip, shows the students pretending to be IS militants, following the beheading of 21 Coptic Christians on a beach in Libya, and using religious language.
The video got out and some villagers protested, with violence breaking out, according to human rights group World Watch Monitor.
It is thought that the arrests managed to reduce some of the violence, however Christian homes were still attacked.
A reconciliation meeting was held in mid-April to limit the reaction of the Muslim community and to protect the Christian community.
During the meeting Christian leaders banned the teacher, Gad Younan, from the village "in order to preserve his life and to calm the situation in the village".
One of the attorneys, Maher Nagib Hanna, told ICC that the judge ordered the teacher to be released after paying bail, however the police refused to let him leave because he was banished from the village and they made his family sign a vow promising not to return to the village again.
His brother, Samir Younan, said: "My brother is a servant in the church, he served the people in the village, he didn't intend to defame Islam.
"Gad is now living in hiding. with his wife and two children, while waiting for the final hearing when he may be convicted and could face as much as five years on the charge of defaming Islam."
The students are expected to remain in prison for another month and a half, where ICC has reported they continue to face threats and harassment.
An ICC spokesperson said: "One of the Muslim prisoners told the students that the police stirred them against them and said to them that these Christian students insulted Islam."
The students' legal team said they were surprised by the verdict, it "was unexpected, and the case of the teacher and the four students is considered the first contempt of religion case in Beni Mazar court.
"Their verdict doesn't depend on applying the law in this case, but on the climate of this case and the point of view of the judge.
"The judge considers that the accused committed a great crime in that they insulted his religion (Islam), so his decision depends on his personal opinion and the climate of this case and satisfying the other angry Muslims, not the law."
Todd Daniels, regional manager for the Middle East said, "The continued imprisonment of these four students is a terrible miscarriage of justice and shows the need for serious reforms to fully protect the rights of Egypt's religious minorities.
"The change must come both from the bottom up - putting an end to violent mobs protesting outside of homes, burning property - and from the top down - a judicial system that does not act simply to quell public outrage.
"While Egypt has an important role to play in countering violent extremism in the region, it must address the issues of extremism it has domestically.
"We urge the Egyptian legal system to rule on the case of the four students and the teacher according to the law, and not merely bending to public pressure to convict."