Officials said Mr Mendez Vargas had been arrested in AguascalientesMexican President Felipe Calderon has congratulated police on the capture of the alleged leader of one the country's top drug gangs, the La Familia cartel.
Police arrested Jose de Jesus Mendez Vargas, also known as "The Monkey", in the central city of Aguascalientes.
Mr Calderon described the capture as a great blow to organised crime.
La Familia has a reputation for violence but claims to protect local communities and promote family values.
Mexico's security spokesman Alejandro Poire said the arrest had "destroyed the chain of command" of the La Familia cartel.
A previous leader of La Familia, Nazario Moreno, was killed by security forces in December 2010.
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