The killing of 16-year-old Mabrouk Soltani on November 13 sparked anger in Tunisia. His killers ordered a 14-year-old who was working with him to bring the victim's head wrapped in plastic to his family.
The video claimed the young shepherd gave information on "the soldiers of the Islamic State" to the Tunisian army.
"This is the fate of all those in the ranks of the tyrants of Tunisia against Jund al-Khilafa (the soldiers of the caliphate)," the video said, written in Arabic.
Jund al-Khilafa is the Tunisian branch of ISIS.
The video then shows the shepherd, looking scared, answering questions from a speaker whose voice seems to have been altered.
With his hands tied behind his back, the boy claims to have been paid by a soldier to monitor the activities of Terrorists in the area.
The terrorist group claims the boy "squealed" on them for money while the young shepherd insists that he has none.
The video ends with the killing of the boy and a song threatening to "come to decapitate" others.
According to the Tunisian authorities, Soltani was murdered by terrirst as he was tending his sheep on Mount Mghila.
Last month, another civilian, also a shepherd, was abducted and killed by terrorist in the central-west province of Kasserine.
Tunisia has faced an upsurge in terrorist violence since its 2011 revolution, but security forces are usually the target.
Several dozen soldiers and police have lost their lives in attacks, most of which are claimed by Al-Qaeda's North African branch.
ISIS gunman Seifeddine Rezgui seen calmly walking on Sousse beach carrying the gun he used to murder 38 tourists including 30 British one.
ISIS claimed an attack that killed 38 foreign tourists at a seaside resort near Sousse in June, and another that killed 21 foreigners and a policeman in Tunis in March.
In mid-November authorities arrested seven women accused of posting propaganda on the Internet on behalf of Jund al-Khilafa.