The suspect, identified as Erick Uriel "N," is a member of the Guerreros Unidos drug cartel, and "is identified in the investigation as one of those who played a decisive role" in the students' disappearance in the southern city of Iguala, prosecution official Alfredo Higuera told a press conference.
"Shortly after the events in the streets of Iguala... (the suspect) was in direct contact with the students," he said.
Mexico remains haunted by the unsolved mystery of the 43 students, who vanished on September 26, 2014 after commandeering several buses to take them to a protest and then being attacked by local police.
But independent experts from the Inter-American Commission on Human Rights have rejected the government's conclusion.
Higuera said Erick Uriel "N" is one of five suspects with a reward of up to $80,000 on their heads over the case.
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