Javier Duarte disappeared in October after he was accused of embezzling millions.
A former Mexican state governor who has been on the run for six months was arrested on Saturday, police said.
Javier Duarte, the former governor of Veracruz state, is suspected of corruption, involvement in organised crime, and embezzling millions.
He was arrested in Guatemala in a joint operation between Interpol and Guatemalan police, Mexico’s attorney general said.
He is expected to be extradited to Mexico at a later date.
Guatemalan police said Mr Duarte was found and arrested in a hotel lobby in the city of Solola.
He is suspected of having siphoned off at least 645 million Mexican pesos ($35m; £28m) of public money that was put into a series of shell companies.
Mr Duarte resigned his post to face corruption allegations – but then disappeared in October 2016.
When authorities raided a warehouse belonging to him, they discovered a wide array of valuable assets, including many paintings.
A search of his luxury ranch also found 17 paintings believed to be by famous artists such as Joan Miro, Fernando Botero and Leonora Carrington.
Under Mr Duarte, Veracruz also became the most dangerous region of the country for journalists , with 17 killed during his term.
He was suspended from this party, PRI – which is also the party of President Enrique Pena Nieto – before his disappearance.
His political opponents from the National Action Party won the election to fill his position in December.
