"The bodies of seven Egyptians were found in Jalluta, east of Benghazi," Benghazi security spokesman Ibrahim al-Sharaa told AFP.
Egyptian foreign ministry spokesman Badr Abdelatty confirmed to AFP that the victims were "all Christians."
But Abdelatty said it was unclear if the killings had a sectarian motive, saying a financial dispute could be behind the murders.
"Egypt has asked the Libyan authorities to open an investigation and to inform it of the results," he said.
Benghazi, cradle of Libya's 2011 armed uprising that toppled dictator Moamer Kadhafi, has seen near-daily attacks on security and other targets as the weak central government has struggled to rein in former rebel brigades turned militias.
The victims were kidnapped from their home late Sunday by an unknown group, Abdelatty said, adding that eight men had been taken originally but one escaped by throwing himself from his abductors' car.
The Egyptians were killed execution-style by gunshots to the head and chest, a medical source in Benghazi said.
Christians have previously been targeted on charges of proselytising in the Muslim country.
State news agency Lana said the bodies were identified by Egyptian residents of Benghazi.
Libyan foreign ministry spokesman Said Lassoued said security forces had opened an investigation into the incident but gave no further details of the crime.
Tens of thousands of Egyptians work in Libya, mostly as labourers.
In January, gunmen kidnapped five Egyptian diplomats in Tripoli and held them for several hours.
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And how many muslims died in Egypt and Libya last year?