The Mexican government says security forces have killed Ignacio "Nacho" Coronel, a top member of the powerful Sinaloa drug cartel.
Coronel was believed to be the right-hand man of Joaquin "Shorty" Guzman, Mexico's most-wanted drug lord.
His death is a major coup for President Felipe Calderon, who has declared "war" on the country's drug cartels.
The security forces say Coronel died in a shoot-out with an elite army group near the western city of Guadalajara.
Nacho Coronel was known as the "King of Crystal" for his control over the production and smuggling of methamphetamine to the United States.
He was widely tipped as Guzman's likely successor to head the Sinaloa cartel, says the BBC's Inma Gil in Mexico City.
His power base was in Jalisco state, but both the US and the Mexican government had issued arrest warrants for him.
The US had offered a $5m (£3.2m) reward for information leading to his capture.
Mexican media quoted Ministry of Defence officials as saying his death would seriously disrupt the operations of the Sinaloa cartel.
According to Mexican government figures, more than 25,000 people have died in drug-related violence since President Calderon launched his offensive against the cartels in late 2006.
President Calderon's government has been dogged by accusations that it treats the Sinaloa cartel more leniently than other drug gangs.
In December, security forces shot and killed another top drug smuggler, Arturo Beltran Leyva.