Edgar Jimenez, known as 'El Ponchis' (The Cloaked One) is believed to have worked as a hitman for a Morelos drugs gang, based just outside of Mexico City.
The boy was caught late last night as he attempted to flee to the U.S., having boarded a plane in the city of Cuernavaca.
The army said he was with his two sisters, one of whom was reportedly the lover of a cartel boss.
They were apparently trying to get to Tijuana on the U.S. border to then travel to San Diego where their mother lives.
One of his sisters, aged 16, was also allegedly involved in the criminal gang.
She apparently disposed of her brother's victims by dumping the bodies on streets and freeways, officials said.
Another teen sister accompanying them is not suspected of being involved with the cartels.
The siblings were living in a poor neighbourhood of Jiutepec, a working-class suburb of Cuernavaca, known as a weekend getaway for Mexico City residents.
The area has an industrial area with Nissan, Unilever and other factories and has rustic single-level concrete homes and some farms.
After being taken into custody, Jimenez and his sisters were transported to a local office of Mexico's attorney general where the boy confessed to his role in gruesome killings to waiting reporters.
'I participated in four executions, but I did it drugged and under threat that if I didn't they would kill me', the teen said calmly.
Authorities in the troubled country say crimes committed by minors have risen across Mexico this year.
Offences ranging from stealing to murder are on the rise with parents saying children as young as eight want to grow up to be a drugs lord.
Watching the wealth of the corrupt world is appealing to some of the children who see it as a way out of their poverty-stricken lives.
Other young boys have been enlisted to work for the cartels who sometimes post videos of interrogations to expose the crimes of their rivals online.
In one video a youth admitted to taking part in random killings.
'When we don't find the rivals, we kill innocent people, maybe a construction worker or a taxi driver', one teen said.
Attorney General Pedro Luis Benitez said that the young boys are easily manipulated.
He said: 'These minors are still not fully developed and so it is easy to influence them, to give them a gun, pretending it is plastic, that it is a game'.
Mr Benitez added: 'They're persuaded to carry out terrible acts, they don't realise what they are doing'.
President Felipe Calderon who launched an offensive to crack down on the cartels four years acknowledged that as quickly as they arrest young boys, more are being recruited.
'In the most violent areas of the country, there is an unending recruitment of young people without hope, without opportunities'.
Offenders under 18 are prosecuted in a separate legal system for most of their crimes.
But they are calls for both the overcrowded adult prison system and that for the young boys to be reassessed.
People being incarcerated in Mexico's federal prisons have more than doubled in the last two years.
In 2008, there were about 4,500 inmates in jail - now there are 11,000 which has been accredited to the government's crackdown on the drug cartels.
2010 is on track to have the highest rate of killings in the country. More than 28,000 Mexicans have been murdered in the past four years.