Ali al-Ansari and another unnamed journalist from Al-Ghadeer satellite television were among the dead, according to local manager Karim Fadhel.
Mustafa Hamid and Qusay Sahib from Iraqiya state television were wounded, said the head of its Diyala provincial office, Uday Abdelkarim.
Accounts differed on the incident, with some sources saying shellfire hit Muqdadiyah itself, while others reported a bombing and clashes north of the town.
Signup to our newsletter and follow us on Facebook and Twitter!
Five militiamen were also killed, and more than two dozen people wounded, security and medical officials said.
Iraq, long one of the most dangerous countries in the world for journalists, became more so after IS launched a sweeping offensive that overran large parts of the country last summer.
The jihadist group beheaded journalists on tape and also issued threats against those reporting in areas it controls.
According to media rights watchdog Reporters Without Borders, four journalists were killed in Iraq last year.