The jail terms for Horie and Miyauchi contrasted with past penalties meted out to Japanese executives convicted of white-collar crimes, who often receive suspended sentences after pleading guilty and showing remorse.
Miyauchi, a 39-year-old tax accountant, had admitted engineering schemes to inflate Livedoor's earnings, including booking phoney orders from allied firms and claiming non-operating gains from sales of company shares as profit.
Toshiyuki Kosaka, the Tokyo District Court's presiding judge, said on Thursday: "In Miyauchi's case, the court had no choice but to impose a jail term given the importance of his role and the enormity of the result."
Miyauchi told the court that "if given a chance, I want to give something back after my release" to the people whom he caused trouble to.
Livedoor lost more than $5 bn in market value following the scandal, which rattled the broader Tokyo market and embarrassed top politicians who had lauded Horie, 34, as the symbol of a dynamic new generation of entrepreneurs.
Prosecutors had asked for a 2 1/2-year prison term for Miyauchi, and 1 1/2 years for Fumito Okamoto, Osanari Nakamura and Fumito Kumagai.