The court in Southwest Sichuan Province sentenced monk Lorang Konchok, 40, to death with a two-year reprieve.
He has also been stripped of his political rights for life, state-run Xinhua news agency reported.
His nephew, Lorang Tsering, 31, was sentenced to 10 years in prison and has been stripped of his political rights for three years, according to the court verdict.
The two incited and coerced eight people to self-immolate, resulting in three deaths, the Intermediate People's Court of the Tibetan-Qiang Autonomous Prefecture of Aba found.
Of the eight people, three set themselves on fire and died in 2012. They were identified as Lorang Tsedrup, Tsenam and Jokba.
The other five people did not self-immolate, after willfully abandoning their plans or after police intervened, the court found, the Xinhua report said.
According to overseas Tibetan groups, over 95 people have committed self-immolations in the recent months in different parts of Tibet Autonomous Region and Tibetan prefectures calling for the returning of the Dalai Lama as well as protesting the Chinese rule.
China has been criticising the Tibetan spiritual leader and his supporters for inciting the self immolations and stiff sentences were seen as an attempt by government to crackdown on those encouraging self immolations.
One person was arrested recently for inciting people to set themselves on fire.