They say Jesus Alfredo Guzman, 29, was one of six members of the Sinaloa Cartel seized by members of a rival gang, Jalisco New Generation.
The incident took place at a restaurant in the resort city of Puerto Vallarta .
Guzman, who is now in jail, had led the Sinaloa Cartel for years. Jesus Alfredo is suspected to be a senior member.
The 29-year-old is wanted on drugs charges by the US.
The US also wants Joaquin "El Chapo" Guzman to be extradited to the US on charges of smuggling vast amounts of drugs into the country.