The two were in a car in Garvagh shortly before 7pm when a vehicle drew up and a gunman opened fire. A third man was injured.
Admitting responsibility in a statement, the IRA claimed the two had been members of the paramilitary Ulster Defence Association. One was the target of an IRA boobytrap bomb in March last year. The murder was the first fatal IRA attack on alleged loyalists since October's bombing of a Belfast UDA office in the Shankill Road, when nine Protestant civilians and an IRA member died in a premature explosion.
The IRA campaign of violence has been curtailed since, with almost all attacks being directed against security force bases and patrols. Only in recent weeks has it returned to trying to kill Protestants.
Last night's attack has increased concern that the republican campaign may widen after killings by the loyalist Ulster Volunteer Force and Ulster Defence Association.
The deaths bring to 14 the total killed so far this year, eight by loyalists, five by the IRA and one by the republican INLA. In the corresponding period last year 27 died, 11 at the hands of the IRA.
Statistics demonstrate that the IRA campaign, while still deadly, has been held to a lower level. As has often happened before, however, an increase in loyalist killings has drawn a republican response.
Last week, after more than a dozen loyalist attacks in a seven-day period, the Taoiseach, Albert Reynolds, called for more protection of vulnerable Catholic areas.