Dong Rubin - a businessman known to his 50,000 online followers by the alias "Bianmin", or frontier person - had long discomfited officials in the southwestern province of Yunnan on issues ranging from environmental safety to police brutality.
He was found guilty by Wuhua district court of conducting "illegal business operations" and "fabricating and spreading online rumours for economic gain", according to the official Xinhua news agency.
Hou Peng, the general manager of Dong's Internet consulting company, was sentenced to three years in jail, and the men were fined 350,000 yuan (USD 56,000) and 50,000 yuan respectively.
In 2009 he sharply criticised the government's handling of the case of Li Qiaoming, a 24-year-old man who died from severe brain injuries while in police custody.
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Police in Yunnan said that Li had died while playing "hide-and-seek" with other inmates, but national online fury sparked by Dong's criticism led authorities to conduct an internal investigation.
It concluded he was beaten to death by three fellow detainees, although three officers were sacked.
Last year Dong again garnered widespread attention when he vocally opposed the planned construction of a petrochemical plant near Yunnan's provincial capital, Kunming.
China launched a national campaign against "rumours" last September, with Internet users facing three years in prison for writing defamatory messages that are re-posted 500 times or viewed more than 5,000 times.
The crackdown has swept up several prominent government critics including Chinese-American billionaire blogger Charles Xue, who was arrested last August.
Shortly after Xue's arrest, Dong wrote on his Sina Weibo microblogging account that police had raided his company office. At the time, he mused about the charges authorities might pursue against him.
A week later, he was detained, and in October he was paraded on state broadcaster CCTV, delivering a televised confession.