Ansar Beit al-Maqdis, which has spearheaded a low-level insurgency against Egyptian soldiers and police, said Tawfiq Mohamed Fareej was killed last week when a car accident set off a bomb he was carrying.
The group has claimed some of the deadliest attacks on Egyptian security forces since the army overthrew Islamist president Mohamed Morsi last July.
One of the group's founders, Fareej was the "field commander" of an August 18, 2011 cross-border raid into Israel that killed eight Israelis, the group said in a statement yesterday.
Fareej was involved in a failed assassination attempt against the Egyptian interior minister in September.
Interior minister Mohamed Ibrahim later identified Fareej as the "leader" of Ansar Beit al-Maqdis and said he was involved in the assassination attempt as well as a deadly December bombing of police headquarters.
The interior ministry itself did not immediately comment on Fareej's reported death.