Senior Mexican drug cartel leader Heriberto Lazcano has apparently been killed in a fight with marines in the northern border state of Coahuila, the navy said.
Strong evidence suggests the body of one of two men killed in the shootout was Lazcano, known as "El Lazca", the navy said.
A statement said more forensics tests would have to be carried out to confirm the identification.
"Information was obtained after the first forensics tests were carried out that yielded indications that suggest that one of the bodies is Heriberto Lazcano," the navy's statement said. "The Navy Department is co-ordinating efforts with Coahuila state, and will be awaiting the conclusions of the forensics examination in the case."
The death of Lazcano would be a major victory for Mexican law enforcement. The Zetas cartel that he helped found with other deserters from an elite army unit carried out some of Mexico's bloodiest massacres, biggest jail breaks and fiercest attacks on authorities.
Lazcano, who is also known as "El Verdugo" (the Executioner) for his brutality, is suspected in hundreds of killings, including the June 2004 murder of Francisco Ortiz Franco, editor of a crusading weekly newspaper in Tijuana which often reported on drug trafficking. Mr Ortiz Franco was gunned down in front of his two young children as he left a clinic.
The United States had offered a five million US dollars (£3.1 million) reward and Mexico an additional 2.3 million US dollars (£1.4 million) for information leading to Lazcano's arrest.
Under Lazcano's leadership, the Zetas recruited more hit men, many of them former Mexican soldiers, and hired "kaibiles", Guatemalan soldiers trained in counterinsurgency, transforming what had been a small group of assassins into a ruthless gang of enforcers for the Gulf cartel. The Zetas were also in charge of protecting the Gulf cartel's drug shipments.
The Zetas split from their former bosses in 2010 and have since been fighting a vicious battle for control of the drug business in north-eastern Mexico, the traditional home base of the Gulf cartel. The result has been a surge of drug-related killings. Lazcano "is credited with strengthening the organisation ... he created a new structure of regional cells that specialise in specific crimes", Mexican federal prosecutors say in their profile of Lazcano.
The Zetas earned their notoriety for brutality by becoming the first to publicly display their beheaded rivals, most infamously two police officers in April 2006 in the resort city of Acapulco. The severed heads were found on spikes outside a government building with a message signed "Z" that said: "So that you learn to respect."