Mexican security forces left 42 of the gunmen dead in a three hour long shootout on Friday which also killed one federal police officer, officials said.
Three gunmen were also arrested.
The battle erupted in the town of Tanhuato, Michoacan state, when a joint force of federal and state security forces encountered the armed resistance in the course of a narcotics investigation, Mexican National Security Commissioner Monte Alejandro Rubido stated at a news conference.
The gunmen belong to a gang from the violence plagued neighboring state of Jalisco, Rubido said.
The governor or Michoacan, Salvador Jara, said during an interview that it is "very likely" that the shootout was with the brazen Jalisco New Generation drug cartel.
The investigation which prompted the shootout began Thursday after a property located in Tanhuato was taken over by a large group of armed men.
The property was described as a 275-acre stretch of land with a main residence, warehouse, and agricultural buildings. It is unknown what, precisely, the gunmen were doing there although narcotics activity is suspected.
The gun battle stretched for hours because of the large size of the property, Rubido said. There were at least three standoffs in various parts of the property, he stated.