The two men, George Wills and Robert Catalano, had been selling the device – known as the Whizzinator – over the internet for three years.
The device was sold with a heating element and fake urine to help people test negative for illegal substances.
They could face up to eight years in prison and a $500,000 ( £334,000) fine.
The men ran an internet company known as Puck Technology, which between 2005 and 2008 sold the Whizzinator and a similar device, known as Number One.
“The Whizzinator is the ultimate solution for a drug testing device,” says a statement on the website of the California-based company, which calls itself the “undisputed leader in synthetic urine.”
“The prosthetic penis is very realistic and concealing is simple, while our quality production and materials assures you that the the Whizzinator will let it flow again and again, anytime, anywhere you need it!”
Mr Wills and Mr Catalano appeared before a federal court in Pittsburgh, and are scheduled to be sentenced in February.
The company apparently does not make a comparable product for women.