A Syrian military source said the army had repelled the assault on Mabouja, a 60-km (40 mile) drive east of the city of Hama. He said the hardline group had massacred civilians there, but did not have a number for the dead.
The Syrian Observatory for Human Rights, which uses a network of contacts to monitor the four-year-old civil war, said Islamic State fighters had killed entire families and the dead included people who had been burnt to death.
The population includes Alawites and Ismailis -- sects deemed heretical by the puritanical Sunni Islam espoused by Islamic State, said Rami Abdulrahman, who runs the Observatory.
Alawites, Ismailis and Sunni residents were among the dead, he said.
The area is some 200 km from Raqqa -- the de facto capital of the Islamic State's self-declared caliphate that spans territory in both Syria and Iraq. It is part of the western region where Syrian President Bashar al-Assad has sought to shore up his control.
Assad, an Alawite, enjoys backing among many members of Syrian minority communities who fear hardline Islamists.
Islamic State fighters have mounted numerous attacks in government-held areas in the provinces of Hama and Homs in recent weeks, even as it has lost ground in the north and northeast under pressure from a Kurdish militia backed by US-led air strikes.