He is thought to have split off from the Tijuana-based Arellano Felix cartel to help efforts by Joaquin "Shorty" Guzman - Mexico's most wanted man - to wrest control of key smuggling corridors in northern Mexico from the Felix clan.
A hitman called "The soup maker" last year confessed to dissolving hundreds of bodies in acid for Garcia, and his gang has been blamed for rising bloodshed in the border city of Tijuana.
The arrest is the second major victory for Felipe Calderon, the Mexican president, after launching a controversial clampdown on organised crime in less than a month.
Arturo Beltran Leyva, another Mexican drug lord, died in a shootout with marines in a raid south of Mexico City last December.
Franc Contreras, Al Jazeera's correpsondent in Mexico City, said: "In the end, observers say that when someone of a high level is caputerd, very quickly the post is filled by a family member of someone vying for power.
"We have numerous trafficking organisations here, using bazookas, grenades ... they even have surface-to-air missiles, so the Mexican government has a huge task ahead of it."
More than 15,000 people have died in spiralling drug violence in the past three years in Mexico.