There were 33 defendants present in the Cairo courtroom to hear the verdicts, while the rest were out on bail.
Family and friends of the defendants cried in shock outside the courthouse, reports said.
The decision to hand over the islands to Saudi Arabia sparked a backlash among many Egyptians.
It was made by Egyptian president Abdul Fattah al-Sisi during a rare visit by Saudi Arabia's King Salman, during which the Saudi king announced plans for aid and investment in Egypt.
Critics says President Sisi "sold" the uninhabited islands, Tiran and Sanafir, in return for the investments.
Saudi-Egyptian island deal sparks anger
But the Egyptian government maintains that the islands always belonged to Saudi Arabia, and were only being looked after by Egypt since the 1950s.
Both secular and Islamist activists called for people to demonstrate against the transfer of the islands.
Police dispersed the protests in April, arresting dozens of people, many of whom were later charged with participation in illegal rallies.
Mr Sisi has faced increasing criticism in recent months on a range of issues, including Egypt's lacklustre economy.
The president, a former army general, previously enjoyed broad support after winning the election in 2014, but has faced increasing discontent.

Craig Douglas and Dylan Rigby, who are both from Essex, are charged with promoting a lottery and advertising unlawful gambling.
Mr Douglas makes gaming videos on YouTube under the pseudonym Nepenthez.
He is also charged with inviting children to gamble.
The two men appeared at Birmingham Magistrates' Court. The case has been adjourned until 14 October.
The Gambling Commission, which brought the prosecution, has been looking into the rise of video game gambling.
It is warning parents that children can be drawn into betting with so-called skins - virtual goods such as weapons or clothes that are a feature of many popular games.
It has been estimated that the global market in betting on video games is worth as much as Â£4bn.
Egypt has sentenced 51 people to two years each in prison for protesting against a decision last month to cede two Red Sea islands to Saudi Arabia.
[NEXT_CONCEPT]
Two men have appeared in court charged with offences under the Gambling Act in what is believed to be the first prosecution involving betting on video games.