He has been identified by French media as Michael Dos Santos, 22, an Islamic convert from an eastern Paris suburb.
Earlier, the government identified the first French militant as Maxime Hauchard, a convert from Normandy.
About 1,000 French jihadists are thought to have gone to Syria and Iraq.
French Prime Minister Manuel Valls said after a security meeting in Beauvais, north of Paris, that "close to 50" French citizens had died in Syria.
"Sadly, we are not surprised to learn that French citizens or residents of France are found at the heart of these cells and taking part in this barbarity," he added.
'Vigilance' call
On a visit to Australia, French President Francois Hollande told reporters in Canberra "there were two French people" in the video.
"One has been categorically identified and the other one is in the process of being identified," he said.
An official in the Paris prosecutor's office, Agnes Thibault-Lecuivre, said there was a "strong presumption" that it was Mr Dos Santos, from the Parisian suburb of Champigny-sur-Marne, in the video, AP news agency reports.
French broadcaster France 2 said (in French) that Mr Dos Santos had been identified by a friend, who recalled how the man had surprised his family when he suddenly converted to Islam.
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French media review - BBC Monitoring
Most news sites lead on the story with Liberation asking, "What is known about the second French jihadist in the video?"
Le Figaro describes Michael Dos Santos as a recent convert to Islam who had adopted the nom de guerre Abu Othman.
According to Le Monde, more than 1,100 French nationals may be involved in jihadist activity in Iraq and Syria, with more than 375 active in front-line fighting.
Le Figaro features a video on its front page of a young Frenchman who recently converted to Islam. He says that he was approached by Islamic State to join in their jihadist campaign as soon as he converted.
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Mr Hollande said officials had not established the "exact role" of the two militants.
He called for families to be given more information about the danger of jihadist websites and urged families to be "vigilant" in stopping young people from being recruited by extremists.
Earlier this week, Mr Hauchard was named by a French prosecutor as one of those leading Syrian prisoners to their execution.
Bare faces
In the latest IS video - unlike previous ones showing beheadings - several militants appear with their heads uncovered.
IS video grab of Maxime Hauchard Maxime Hauchard went to Syria in August 2013, French authorities believe
The footage showed 18 Syrian prisoners, described as soldiers, forced to kneel in front of the militants before being beheaded.
The men were described as pilots and officers loyal to Syrian President Bashar al-Assad, Reuters news agency reported.
The video also shows the severed head of Abdul-Rahman Kassig, a US aid worker who was kidnapped in Syria last year.
IS said the video was shot in the Syrian town of Dabiq, which features in Islamic prophecies as the site of a final battle between Muslims and their enemies.
Analysts say the video was elaborately produced, but also reflected IS's weakness, as its militants had been driven off key sites by US-led coalition air strikes.
Foreign fighters
File photo: Armed police officers guard the entrance of the Brussels Jewish Museum, after the museum revealed a commemorative plaque for the victims of a shooting, in Brussels, 9 September 2014 A Jewish museum in Brussels was attacked by a French gunman in May and reopened in September
Concerns about the involvement of French citizens in the conflict were heightened after a gun attack earlier this year on a Jewish museum in Brussels.
The attack, in which four people were killed, was carried out by 29-year-old Mehdi Nemmouche, a Frenchman who had fought as a jihadist in Syria.
France has the largest Muslim community in western Europe outside Russia, and is thought to provide the biggest contingent of Western jihadists in Syria and Iraq.
More than 100 French citizens fighting in the Middle East have already returned to France, with the vast majority now facing charges under terrorism legislation, the BBC's Lucy Williamson in Paris reports.
Earlier this month, France convicted its first such returnee with a jail term of seven years, our correspondent adds.
The government has also given police new powers to confiscate passports, to prevent people travelling abroad to join militants.
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