The killing of Paul Johnson and Nicholas Berg triggered increased hate mail, verbal attacks and anti-Muslim graffiti.
Death threats against American Muslims have risen and mosques have been vandalised.
"Since 9/11, every time there is an incident overseas attributed to Muslims or Arabs, we go on orange alert ourselves," said immigration solicitor Sohail Muhammad.
"There are individuals here who are off the wall, who think that every woman who wears a hijab or every man named Muhammad is out to blow things up," he added.
Dissidents thought to have ties with al-Qaida in Saudi Arabia decapitated Johnson, an American engineer, after warning that they would kill him if the Saudi government did not release detainees. Berg, a businessman, met a similar fate last month in Iraq.
Following Johnson's death, anti-Islam signs surfaced around the rural New Jersey neighbourhood where he once lived. One read "Stamp Out Islam" next to a drawing of a boot over a crescent and star. Another, hung on a mailbox next door to Johnson's sister's home, was more detailed.
"There are individuals here who are off the wall, who think that every woman who wears a hijab or every man named Muhammad is out to blow things up"
"Last night I wasn't a racist, but today I feel racism towards Islamic beliefs," it read. "Last night Islamics (sic) had a chance to speak up for Paul Johnson, but today it's too late. Islamics better wake up and start thinking about tomorrow."
The New Jersey attorney general sent bias crimes investigators to the area, along with stepped-up state police patrols. The signs are gone now, replaced with hand-lettered placards on utility poles that say "Our prayers are with the Johnson family."
But more anti-Muslim graffiti appeared on Thursday at a Muslim man's home in Egg Harbour Township.
"It's really our fear coming true," said Faiza Ali of the New Jersey chapter of the Council on American-Islamic Relations.
"It indicates a hatred that could turn into something violent."
Relatives of Johnson, in a statement made through a church pastor after a memorial service on Saturday, said that they hope his legacy is one of peace in the land he grew to love during more than a decade abroad.
"When history is written on the war on terrorism, let Paul's death be the catalyst that led to thousands more Westerners working in harmony with people in the Middle East to ensure fear and barbaric acts against free peoples come to an end," Reverend Kyle Huber of Greentree Church said.
The day after Johnson's death, a coalition of Muslim groups in Paterson, the heart of New Jersey's Arab-American community, held a rally to condemn the killing
A few days later, vandals tossed empty liquor and beer bottles at a mosque in Union City as congregants inside mourned a teenager who died in a car crash.
Some Americans have threatened
to behead Muslims in the US
"If they are throwing empty bottles today, they could be throwing rocks, or worse, shooting at us tomorrow," said Aref Assaf, president of the American Arab Anti-Discrimination Committee's New Jersey chapter.
Two mosques in Florida were vandalised in the days after Johnson's killing.
In the Tampa suburb of Lutz, someone broke into the Islamic Community Centre and scrawled "Kill All Muslims" on the mosque's interior walls, then smashed windows. In Charlotte Harbor, someone vandalised a mosque's sign and left threatening phone messages.
In the St Louis suburb of Ballwin, Missouri, vandals painted a swastika and the word "Die" on the wall of the Dar-al-Islam mosque.
Mosque construction protested
In Texas, dead fish were dumped near the entrance sign to a mosque under construction in a suburb of Houston.
And in the Chicago suburb of Orland Park, residents urged officials this past week to reject a mosque's building application.
A Baptist pastor told a public hearing he feared it would attract Islamic extremists and violence. The centre was approved over boos and catcalls from the audience.
"I believe the time is coming when Muslims will not be safe inside the US borders," one man wrote to the Washington, DC-based Council on American-Islamic Relations.
"I see nothing wrong with us doing the same things to them that they are doing to innocent people."
"It is high time you people wake up and smell the blood," another man wrote to Assaf's group in New Jersey.
"Turn in the terrorists. They are your relatives, in a lot of cases. Cousin Omar. Uncle Mohammad. You know what I mean. Until you come forward to help us stamp out this vermin, you are as bad as they."