Jacinto Nicolas Fuentes, alias "Don Leo," was arrested in Lima, Colombia Reports said Thursday.
Fuentes was one of the men who assumed control of the neo-paramilitary and drug trafficking group after its previous leader was arrested in December, Colombian police say.
Los Urabenos is based in western Colombia.
Fuentes is believed by Colombian police to be the link between Los Urabenos and the 33rd Front of the Colombian rebel group FARC.
Fuentes entered Peru illegally in January, El Espectador reported.
Colombian police arrested Fuentes with a group of armed men in 2008 in the northern region of Antioquia, but he was released shortly afterward under mysterious circumstances.
Authorities in both countries are expected to meet in the next few days to determine how to deport Fuentes to Colombia.