US District Judge Thomas F.Hogan on Wednesday ordered Time magazine reporter Matthew Cooper jailed for up to 18 months and the magazine fined $1,000 a day for refusing to comply with a grand jury subpoena seeking details about the source.
The judge, however, suspended the sentence and fine pending the outcome of an appeal.
The ruling was nearly identical to one issued last week by the judge in the case of Judith Miller, a reporter for The New York Times who is also refusing to name her sources.
Both Miller and Cooper are expected to join together in appealing their cases on First Amendment grounds.
"No reporter in the United States should have to go to jail for simply doing their job," Cooper said.
The court investigation concerns whether a crime was committed when someone leaked the identity of CIA officer Valerie Plame, whose name was published by syndicated columnist Robert Novak on 14 July, 2003.
The column appeared after Plame's husband, former Ambassador Joseph Wilson, wrote a newspaper opinion column criticising President George Bush's claim that Iraq had sought uranium in Niger – a claim the CIA had asked Wilson to check out.
Plame's ambassador husband had
debunked Bush's claim
US president George Bush claimed in his State of the Union speech made on 28 Jan 2003 that Saddam Hussein had sought to source uranium in Africa for nuclear weapons manufacture.
Administration officials later admitted the claim should never have been made as it rested on faulty British intelligence.
They blamed the error on the White House's desperation to grasp anything that might bolster its case that Saddam Hussein was developing nuclear weapons.
Wilson has said he believes his wife's name was leaked as payback for his outspokenness.
Disclosure of the identity of an undercover intelligence officer can be a federal crime if prosecutors can show the leak was intentional and the leaker knew about the officer's secret status.
Prosecutors have interviewed Bush, Vice-President Dick Cheney, Secretary of State Colin Powell and other current or former administration officials in the investigation.
At least five reporters have been subpoenaed.