Chérif and Saïd Kouachi, who had announced their desire to be martyrs for the Islamist cause, died while trying to escape from a printworks in a town north-east of Paris.
Security sources say they fired at police and were cut down as they tried to flee.
The hostage they had taken was reported to be safe.
The Kouachi brothers were born in Paris to parents of Algerian origin but, when their mother became too ill too look after them, they along with another brother and a sister, spent six years in an orphanage.
Their mother died in 1995.
Chérif Kouachi, 32, had worked as a pizza delivery boy and was a pot-smoking rap fan before coming under the influence of a preacher at the Addawa mosque where he lived near the Stalingrad metro station in northern Paris.
In 2005 he was arrested before travelling to Syria, from where he'd intended to travel to Iraq to fight against US and coalition forces there.
In 2008 he was convicted for involvement in a network sending fighters to Iraq.
He told the court that he was motivated by US troops’ abuse of detainees at Abu Ghraib prison in Iraq.
After his release he worked on the fish counter of a supermarket in a Paris suburb and kept his views quiet but appears to have renewed his contacts.
Much less is known about his older brother Saïd, 34, who has been identified as the main attacker in Wednesday's bloodbath.
A senior US administration official told French news agency AFP that one of the two brothers trained with Al-Qaeda in Yemen.
It now seems it was the Saïd, and that he returned to Yemen in 2011.
Investigators are now looking into whether Al Qaeda in Yemen ordered the attacks on Charlie Hebdo.
The pair reportedly shouted “Tell the media that it is Qaeda in Yemen” during the Charlie Hebdo attack and one of the group’s leaders, Harath al-Nazari, has welcomed the attack.
Both brothers were in the US database as terror suspects and also on the no-fly list, meaning they were barred from flying into the United States.
Amedy Koulibaly, the 32-year-old of Malian origin who took hostages at a kosher supermarket on Friday after killing a police officer on Thursday, appears to known the Kouachi's through the jihadi network that led to Chérif's imprisonment.
Following a conviction for theft when he was 19 years old, he was frequently involved in petty crime until he became involved in radical Islamist circles.
In 2010 he was sentenced to five years in prison for his part in a plot to free Smaïn Aït Ali Belkacem, jailed for his part in a string of attacks, including a deadly bombing on a Paris metro station, in 1995.
While working at a Coca-Cola plant in 2009, Koulibaly was among a group of employees who met then-president Nicolas Sarkozy at the Elysée presidential palace.
On Saturday police were searching for his partner and alleged accomplice, Hayat Boumeddienne, who was believed to be armed and dangerous.