RAPPER Jam Master Jay, one of the founder members of the Run-DMC, was murdered in 2002 "in cold blood" as part of a dispute over a drugs deal, U.S. prosecutors said on Monday.

They announced that two men had been charged with his murder, bringing to a close the attempt to solve one of the biggest unsolved killings in the world of rap.

Jam Master Jay, 37, whose real name was Jason Mizell, was shot inside a recording studio in the New York City borough of Queens.

"This is a case about a murder that for nearly two decades had gone unanswered, and so today we begin to answer that question of who killed Jason Mizell, and why," Seth DuCharme, the acting U.S. Attorney for the Eastern District of New York, told a news conference.

One of the accused men, Karl Jordan Jr., pleaded not guilty to murder and eight drug-related charges through his lawyer when he was arraigned on Monday. DuCharme said the other man, Ronald Washington, would be arraigned later this week. If convicted they would face 20 years to life behind bars.

"They walked in and they murdered him (Mizell) in cold blood," DuCharme said.

Run-DMC, one of the best-known rap acts of the 1980s, was founded in New York City in 1981. Jam Master Jay was a founder member along with Joseph “Run” Simmons and Darryl “DMC” McDaniel. Their hits included “It’s Tricky,” “Christmas in Hollis” and the Aerosmith cover “Walk This Way.”

Washington, 56, who is already in prison, was previously named as a suspect in Mizell's murder in 2007 but was not charged. Jordan, 36, was arrested on Sunday.

According to the indictment, Washington and Jordan entered Mizell's recording studio in Queens on the evening of Oct. 30, 2002. Both men were armed. Jordan fired two shots at close range at Mizell, striking the rapper once in the head.

Investigators allege the motive for the killing was a dispute over the distribution of about 10 kg (22.05 lb) of cocaine that Mizell had acquired elsewhere.

Washington and Jordan had intended to distribute the cocaine, but Mizell "had recently informed Washington that the defendant would not be involved in distributing the narcotics" which precipitated the murder, according to the court filings.