Investigators told Associated Press that militants had forced their way into the home of plumber Kamel Youssef on Thursday and killed him in front of his wife and children.
The family's home was then set on fire.
The killing is the sixth murder in less than a month and comes just days after the release of a video by Islamic State calling for their followers to target Egypt's Coptic Christian minority.
On Wednesday, suspected IS supporters abducted, shot and burnt alive Christian father and son Saad and Medhat Hana.
All of the murders took place in the Sinai Peninsula, where Egypt's Islamic State affiliate is based.
Around 10 per cent of Egypt's population is Christian.
Egypt is number 21 on Open Doors' World Watch List 2017 for persecution against Christians.