San Francisco Chronicle reporters Mark Fainaru-Wada and Lance Williams have as yet declined to name the source who allowed them access to transcripts of grand jury testimony from athletes involved in the long running doping saga.
"They have said they will go to jail before they will comply," said U.S. District Judge Jeffrey White.
"Certainly no fine is going to facilitate the coercive effect of its order."
"The only appropriate sentence is to incarcerate these two individuals," he continued. "The court is hopeful that they will consider their position before their incarceration."
The two journalists who also wrote a book about the BALCO scandal face up to 18 months in prison, longer than any of those implicated in the BALCO doping distribution.
Because the unauthorised distribution of grand jury transcripts is a criminal offence, White ruled in August they must disclose their source.
However the pair said they were looking to the 9th U.S. Circuit Court of Appeals to overturn the decision.
"We remain hopeful that we are going to get some relief at the 9th Circuit," Fainaru-Wada said.
"We think we are going to win."
Earlier, the reporters addressed a packed courtroom in an effort to have the judge impose a penalty of $1 a day for their refusal to comply with the grand jury subpoena.
"Their demands are impossible: They demand I give up my career and my livelihood," Williams said to court.
"They want me to throw overboard deeply held ethical beliefs."
"I do despair for our country if we go very far down this road. No one will talk to reporters."
His colleague added, "I do not wish to spend even a minute in jail. However, I will not betray the confidences."
Ironically, the judge praised the reporters and said he was faced with a difficult area of the law, however he remarked that every citizen had to answer grand jury questions.
Federal prosecutors are investigating whether San Franciso Giants baseballer Barry Bonds, the second greatest home-run hitter in U.S. baseball history, lied to the grand jury about his past links to steroids.
Bonds' trainer is in prison after refusing to answer questions about the San Francisco Giant.
The case is the latest in recent years in which U.S. prosecutors have increased efforts to get journalists to reveal confidential sources. Prosecutors claim the two men should be jailed because every citizen must obey court orders.