Ronald Washington and Karl Jordan Jr are charged with the DJ's murder.
The men are also accused of trafficking drugs.
The artist - real name Jason Mizell - was shot in the head by a masked attacker at his recording studio in Queens, New York.
Federal investigators speaking anonymously to The New York Times said they believe that Jam Master Jay was financing a drug operation, and his involvement contributed to his death.
"There was beef – it didn't go as planned," an investigator said.
Mr Washington, 56, was already in prison when the charges were brought against him. He was convicted and sentenced to prison for a robbery.
Mr Jordan had previously gone to prison for shooting Mr Mizell's nephew.
Investigators have puzzled over the death of Mr Mizell for 18 years.
One theory held that Mr Mizell's death was the result of his connections to rapper 50 Cent. Mr Mizell signed 50 Cent – real name Curtis Jackson – to his record label, Jam Master Jay Records. Investigators believed there may have been an attempt by 50 Cent's rivals to hurt him by killing Mr Mizell, but law enforcement later abandoned that theory.
Mr Mizell became a legend in the world of hip-hop thanks to his founding role as Run-DMC's DJ.
In the years preceding his death, Mr Mizell focused more on finding and signing new talent. Months before he died, Mr Mizell founded the Scratch DJ Academy, which taught students how to be DJs.
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