Dámaso López Nuñez was picked up in Mexico City, according to the office of Mexico's attorney general.
His arrest follows January's extradition of Joaquin "El Chapo" Guzman,
the Houdini-like master of escape who is accused of running the Sinaloa cartel -- one of the world's largest drug trafficking organizations.
Guzman awaits trial in New York on 17 counts accusing him of running a criminal enterprise responsible for importing and distributing massive amounts of narcotics and conspiring to murder rivals.
The Sinaloa cartel controls an estimated 40% to 60% of the marijuana, cocaine and heroin peddled on the streets of the United States.
Source: Information from US led to arrest
López Nuñez, who is believed by many to have taken over the cartel from Guzman, could now follow "El Chapo" across the US-Mexico border. He is expected to face charges in Virginia for alleged distribution of cocaine and money laundering, according to a source with knowledge of the investigation. The United States provided information leading to his arrest, the source said.
López Nuñez nicknamed "El Licensiado," a title given to a college graduate, was indicted in November 2011 in Virginia. He faces a maximum penalty of life imprisonment, if convicted.
The indictment was unsealed in 2013. In January 2013, the US Treasury Department's Office of Foreign Assets Control (OFAC) designated López Nuñez under the Foreign Narcotics Kingpin Designation Act -- which prohibits US persons from conducting financial or commercial transactions with him and freezes any assets under US jurisdiction.
Reputed top lieutenant of 'El Chapo' Guzman
OFAC at the time identified López Nuñez as a top lieutenant of Guzman. López Nuñez helped Guzman escape from Mexican federal prison in 2001, according to OFAC.
In 2015, Guzman staged another daring prison escape through a mile-long tunnel that featured a motorcycle on tracks. The trafficking of heroin, marijuana, cocaine and methamphetamine into the United States from Mexico is an annual $19 billion to $20 billion industry, according to a Department of Homeland Security report.
The cartel has reputedly held a dominant share of that market, thanks in part to Guzman's sophisticated business strategies and Sinaloa's control of trafficking routes.
A US Customs and Border Protection report that analyzed seizure data along the border between 2009 and 2010 found that "the removal of key personnel does not have a discernible impact on drug flows" into the United States.