South Sudanese rebel militia chief Peter Gadet and government infantry commander Santino Deng on Friday were hit by an EU travel ban and asset freeze for atrocities and obstructing the peace.
Gadet, who has also been sanctioned by the US, is accused of leading an attack on the town of Bentiu in May that broke a ceasefire and left 200 civilians dead.
Deng led the offensive to retake Bentiu from rebel forces in a battle that aid groups have described as particularly ruthless.
The European Union sanctions follow six months of fighting between troops loyal to President Salva Kiir and those backing his rival and former deputy Riek Machar.
More than 1.5 million people have been displaced and at least 10,000 people killed in the world's newest country amid what the EU said were "appalling human rights violations and crimes against humanity".
EU diplomats announced the sanctions earlier but had refused to divulge the identities of the two military leaders before they took effect on Friday.
An existing arms embargo against South Sudan will remain in place.
The EU warned further sanctions were on the table if progress stalled in the coming weeks.
The EU said it was "unacceptable" that a ceasefire agreement signed January 23 and renewed May 9 continued to be breached.