The militants took control of Al-Qaryatain in the central province of Homs early on Sunday, the Syrian Observatory for Human Rights monitor said.
Violent clashes broke out after the militants sneaked in, the Britain-based Observatory's Rami Abdel Rahman said.
Government troops had surrounded the town, where several Christian families are believed to be living, he said.
Al-Qaryatain was home to some 30,000 people before Syria's war broke out in 2011, 900 of them Christians.
Regime forces recaptured Al-Qaryatain in April 2016 after eight months of militants control.
Air strikes kill 28 civilians in Syria safe zone: monitor
In early August 2015, IS abducted 270 Christians from the town, transporting them around 90 kilometres (55 miles) away deep in the Syria desert and locking them up in an underground dungeon. They were freed 25 days later.
The same month, IS destroyed parts of a monastery in the town and reduced a fifth-century mud brick church to rubble using explosives and bulldozers.
73 Syria government fighters killed in IS attacks: monitor
Earlier this week the militants launched an assault on government positions in Syria's vast Badiya desert, killing at least 128 regime troops.
Syrian troops pushed through the desert, which separates the main cities of the west from the Euphrates Valley this summer, and broke a years-long IS siege on government enclaves in the eastern city of Deir Ezzor last month.
In addition to the Russian-backed government offensive, a US-backed alliance of Kurdish and Arab fighters is battling the group, which is also under attack in neighbouring Iraq.
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