Mohamed Taha was snatched from outside his home in the capital Khartoum on Tuesday.
A photograph showed his body bound at the feet and hands with his severed head next to his body, a Reuters witness said on Wednesday.
He was found on a dirt street in a middle-class residential district of southern Khartoum.
Dozens of Sudanese journalists gathered at the Khartoum mortuary, guarded by heavily armed police.
Aziza Abdel Rahman, a journalist working for the country’s armed forces magazine, said: “The Sudanese press will not be intimidated. We will write our views even more. This will not stop us.”
Arrested last year
Taha was arrested last year and his al-Wifaq paper closed for three months after it published a series of articles questioning the roots of the Prophet Muhammad, which were condemned by Sudan’s powerful Islamists.
Local papers quoted his family as saying a group of men bundled Taha into a car outside his home and sped off towards central Khartoum.
Kidnapping of civilians is common in Sudan’s war-torn western region Darfur and was a feature in the south during large-scale conflict there, but is very rare in the capital Khartoum.
Taha was an ally of the government, which took power in a military coup in 1989.
The government in northern Sudan follows strict Sharia law but has been opposed by some Islamist organisations.
One source in the Islamic community in Khartoum told Reuters that while Taha was in jail last year, he was protected by government soldiers who feared for his life.