The official said Guzman, accompanied by a female, was captured in a joint operation with Mexican marines and Drug Enforcement Administration authorities overnight at a hotel in the beach resort of Mazatlán.
The operation had been in the works for four or five weeks, the official said.
Phil Jordan, who spent three decades with the DEA and headed the agency's El Paso Intelligence Center, said the arrest represents a huge blow to the world's most powerful drug boss.
"It is a significant arrest provided he gets extradited immediately to the United States," Jordan told CNN. "If he does not get extradited, then he will be allowed to escape within a period of time.
"When you arrest the most powerful man in the Americas and, in Mexico, if you talk to any cartel member they'll say that he's more powerful than Mexican President Pena Nieto. This would be a significant blow to the overall operations not only in the Americas, but Chapo Guzman had expanded to Europe. He was all over the place. If he is, in fact, incarcerated, until he gets extradited to the United States, it will be business as usual."
In Washington a senior administration official described the arrest as "huge" and said it was "a Mexican-led operation, but one with very strong U.S. government support."
"This has been a long time coming, and hopefully puts a rest to the nonsense that this Mexican government isn't focusing on security and that the U.S. and Mexico aren't working well together," the official told CNN. "They are, and we do."
Guzman, who authorities say has eluded capture for years, is wanted in the United States on multiple federal drug trafficking charges and last year was named a Public Enemy No. 1 by the Chicago Crime Commission.
His nickname, which means "Shorty," matches his 5-foot-6 frame.
Guzman escaped from a high-security Mexican prison in 2001 and avoided being caught because of his enormous power to bribe corrupt local, state and federal Mexican officials.
Guzman has been included in Forbes' World's Most Powerful People list since 2009.
Guzman has been named in multiple federal drug trafficking indictments in the United States and has been on the Drug Enforcement Administration's most-wanted list. His drug enterprise stretches throughout North America and reaches as far away as Europe and Australia.
The Sinaloa cartel has been blamed for its role in the bloody drug war that has plagued Mexico in recent years.
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