Karim al-Banna, a 21-year-old whose own father testified against him, was jailed by a court in the Nile Delta province of Baheira on Saturday, lawyer Ahmed Abdel Nabi told AFP.
"He was handed down a three-year prison sentence, and if he pays a bail of 1,000 Egyptian pounds ($ 140 or 117 euros) the sentence can be suspended until a verdict is issued by an appeals court," Abdel Nabi said, adding that an appeal was to be heard on March 9.
Abdel Nabi said his client's father had testified against his son, charging that he "was embracing extremist ideas against Islam".
Banna's name had appeared in a list of known atheists in a local daily after which his neighbours harassed him, said Ishaq Ibrahim, a researcher on religion and beliefs at the Egyptian Initiative for Personal Rights.
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When Banna went to file a complaint against them at a police station, he was accused of insulting Islam and arrested, said Ibrahim, who has been tracking Banna's case.
Banna has been in custody since November.
In December 2012, a 27-year-old blogger, Alber Saber, was sentenced to three years in jail on charges of blasphemy.
And last June, a Coptic Christian man was sentenced to six years in jail for insulting Islam.
The authorities have stepped up measures, including organising workshops, to counter atheism.
Egypt's constitution outlaws insults against the three recognised monotheist religions -- Islam, Christianity and Judaism.