The eldest brother of Mexico's once powerful Arellano Felix drug cartel family was killed by gunmen dressed as clowns at a children's party, according to a Mexican investigator.

Francisco Rafael Arellano Felix, 63, was shot dead on Friday during a family event in Cabo San Lucas, a tourist resort in the Baja California peninsula, state special investigations prosecutor Isai Arias told the AP news agency on Saturday.

"He was hit by two bullets, one in the thorax and one in the head," Arias said, adding that the former Tijuana drug cartel lieutenant's body was identified by relatives.

Authorities close to the case said the gunmen were disguised as clowns when they shot Arellano Felix at the party in the luxurious Casa Oceano tourist residence.

An official of the Baja California Sur state prosecutor's office told the AP that the costumes included a wig and a round red nose.

Brutal cartel

The Arellano Felix brothers once dominated drug trafficking between Mexico and California through their brutal Tijuana cartel, inspiring characters in the Steven Soderbergh film, Traffic.

Most brothers have been either killed or arrested, leaving the cartel in tatters while rivals rose in prominence.

Francisco Rafael Arellano Felix was arrested in 1980 in San Diego, California, for selling drugs and returned to Mexico upon his release on bail.

In 1993, he was arrested in Mexico and jailed on drug charges. He was extradited to the United States in 2006 and was sentenced to six years in prison after confessing to selling drugs to an undercover agent.

He was released in 2008, winning time off his sentence for good behaviour, and repatriated to Mexico, according to his attorney at the time.

Another brother, Ramon, was killed in a police shootout in 2002. Three other brothers are in US prisons, including Eduardo, who was sentenced to 15 years by a California court in August for money laundering.

Security experts believe the cartel is now run by the brothers' sister Enedina and her son Fernando, known as "The Engineer".

Violence linked to drug trafficking and organised crime has left more than 70,000 dead in Mexico over the past seven years.