The death of Zahran Alloush, 44, head of Jaysh al Islam, is a big blow to rebel control of the rural eastern suburban area of Damascus known as al Ghouta, the rebels said.
Defence experts say the disarray among the rebel forces could also consolidate Syrian President Bashar al-Assad's control over the rest of the area.
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The rebel sources said that in the raid Russian planes fired at least 10 missiles at a secret headquarters of the group, which is the largest rebel faction in the area and has about 15,000 to 20,000 fighters, according to Western intelligence.
The Syrian army said Alloush was killed as the result of intelligence on the ground. Rebels blamed Russian sophisticated spying planes which they say rarely leave their skies.
A rebel source said the group had chosen one of their top military commanders, Abu Hammam al Buwaidani, as their new head.
"Alloush's martyrdom should be a turning point in the history of the revolution and rebel groups should realise they are facing a war of extermination and uprooting by (Russian President Vladimir) Putin's regime," said Labib al Nahhas, a senior figure in the main Ahrar al-Sham rebel group.
Jaysh al Islam has effectively been running the administration of the Eastern Ghouta area since 2013, when the group was formed from an amalgamation of scores of rebel brigades.
The rebels said Alloush was killed while holding a meeting with other rebel leaders in the Marj area of al-Ghouta, which has been the target of a major Syrian assault in the last few weeks.
Jaysh al Islam was one of the main rebel groups that attended a recent Saudi-backed opposition meeting in Riyadh and will be part of a negotiating team that is expected to hold talks with Assad's government in Geneva.
Before setting up Jaysh al Islam, Alloush had founded Liwa al-Islam, or the Brigade of Islam, with his father Abdallah, a Salafist Syrian cleric based in Saudi Arabia. He had a postgraduate degree in religious studies from a Saudi university.
Alloush, who was released by the Syrian authorities at the start of the conflict in 2011 when it let scores of Islamist detainees go free, had been criticised for a crackdown on dissidents in the areas he controlled.
Activists accused him of kidnapping several prominent figures.
Alloush was ideologically at odds with Islamic State and al Qaeda, espousing a more moderate brand of Islam. He fought against more militant Islamists and drove them out of his territory. He had dozens of jihadists locked up behind bars.
Syria has long accused Saudi Arabia of financing arms and other supplies to Alloush. But there have also been reports that while on regional visits to countries hostile to Assad's government including Turkey and Saudi Arabia, Alloush failed to win the support he wanted for his group.
Al-Ghouta has been under siege for years and has been the target of some of the most intensive raids on civilians living in the once heavily populated area.
A chemical gas attack in Ghouta in August 2013 that the United States said killed 1,400 people and which the West blamed on forces loyal to Assad prompted the threat of Western military intervention in the country.
Deal to evacuate Syrian Islamist fighters halted
A UN-sponsored deal to give safe passage to more than 2,000 Islamic State fighters and other hardline insurgents holed up in rebel-held south Damascus neighbourhoods has been suspended, Lebanese Hezbollah's TV station said on Saturday.
It said the deal fell through after a top rebel commander, Zahran Alloush, was killed in an air strike on Friday.
The convoy carrying the fighters had been due to pass through territory he controlled en route to their ultimate destination of Raqqa, the de facto capital of Islamic State in northern Syria.
The TV report said coaches that had arrived on Friday to pick up the fighters and at least 1,500 family members had turned back.
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