Luis Humberto Peralta Hernandez, 44 was believed to a top figure in the Juarez drug cartel who's deadly rivalry with the Sinaloa cartel has led to thousands of death in the Northern part of the country.
He had been accused of involvement in nearly 100 murders, was carrying false ID, which delayed identification of the body.
Three people alleged to be accomplices were arrested and have been taken to the capital, Mexico City, for questioning.
There have been more than 34,000 drug-related killings in the country since 2006, when President Philipe Calderon launched a huge crackdown against the drug cartels.
The Juarez cartel is behind many of the recent gruesome executions and decapitations in Ciudad Juarez.
There were more than 3,000 murders in 2010, making it Mexico's deadliest city by far.
The activities of the Juarez cartel, also known as the Carrillo Fuentes Organisation, are said by prosecutors to extend to controlling many of the drug smuggling routes from Mexico into the US.