The al-Rawda mosque in the town of Bir al-Abed was bombed and fleeing worshippers were then gunned down.
The military has conducted air strikes on targets in nearby mountains, Reuters news agency reports.
No group has yet claimed the attack, the deadliest in recent memory.
Egyptian security forces have for years been fighting an Islamist insurgency in the Sinai Peninsula, and militants affiliated with so-called Islamic State (IS) have been behind scores of deadly attacks in the desert region.
They usually target security forces and Christian churches, and the bloody attack on a mosque associated with Sufi Muslims has shocked Egypt.
“What is happening is an attempt to stop us from our efforts in the fight against terrorism,” Mr Sisi said in a televised address hours after the attack.
“The armed forces and the police will avenge our martyrs and restore security and stability with the utmost force.”
Three days of national mourning have been declared.
Mr Sisi, the former head of Egypt’s armed forces, has emphasised national security and stability during his time as president.
Dozens of gunmen surrounded the mosque in vehicles and bombed it before opening fire on those trying to escape.
The assailants are reported to have set parked vehicles on fire in the vicinity to block off access to the mosque, and they fired upon ambulances trying to help victims.
At least 100 people were wounded, reports say, overwhelming hospitals.
It is the deadliest militant attack in modern Egyptian history. Bir al-Abed is about 130 miles (211km) from Cairo. (Courtesy BBC)