Mario Armando Ramirez Trevino, 51, of the Gulf cartel, was taken into custody Saturday morning near Rio Bravo, Tamaulipas, the Los Angeles Times reported.
Authorities said they discovered 25 bodies -- victims of at least three different massacres -- at the time of Ramirez's arrest.
Ramirez, known as El Pelon, or the Bald One, had been wanted in the United States since 2008 on drug distribution charges. The U.S. State Department offered a $5 million reward for information leading to his arrest.
It was not reported whether Ramirez will be extradited to the United States.
Saturday's arrest was the second apprehension of a major drug lord since Mexican President Enrique Pena Nieto took office in December.
Zetas leader Miguel Angel Trevino Morales, known as Z-40, was arrested in July.