The Ukraine club's supporters allegedly behaved in a racist manner at Dynamo's Champions League clash with Paris Saint-Germain in November last year and again in the Europa League against Bordeaux in February.
And their next home European game will be behind closed doors, a punishment they will suffer once more if they infringe again during a three-year probationary period, although the club have appealed the decision.
UEFA's general secretary Gianni Infantino announced tough anti-racism sanctions at a conference in Manchester on Wednesday, and his organisation has taken a dim view of the Kiev fans' conduct.
A statement on the UEFA website read: "FC Dynamo Kiev have been ordered to play their next two UEFA competition home matches behind closed doors due to racist conduct by supporters.
"The first match behind closed doors applies to the next UEFA club competition match for which the club would qualify, while the sanction for the second match is deferred for a probationary period of three years.
"The Ukrainian club has lodged an appeal against this decision and the date of the UEFA Appeals Body hearing has yet to be decided."
Dynamo are currently third in the Ukrainian league and therefore in contention to return to the Champions League.
Infantino said at the conference that, in future, there will be partial closure of stadiums for a first incident of racist abuse by fans and a full closure for a second offence.