The students went missing near Iguala, Guerrero on Sept. 26 after clashing with police and masked men, sending shockwaves across Mexico and prompting thousands to march in the beach resort of Acapulco on Friday to demand answers about their fate.
Authorities have arrested dozens of police, who are believed to have links to a gang called Guerreros Unidos, or "United Warriors," which split from the infamous Beltran Levya Cartel.
On Friday, officials said they had captured the group's leader, Sidronio Casarrubias Salgado, along with a collaborator, weapons and vehicles. They said he was currently giving a statement to authorities.
Attorney General Jesus Murillo Karam told a televised press conference the arrest marked "the beginning of a new route of investigation that can lead us more quickly and easily to the truth."
The case has undermined President Enrique Pena Nieto's pledge to restore order to Mexico. Drug violence exploded during the rule of his predecessor, Felipe Calderon, and has claimed about 100,000 lives since 2007.
Thousands of protesters marched along Acapulco's famed coastal boulevard Friday demanding the safe return of 43 missing students from a rural teachers college, and federal officials announced a key arrest that could produce new leads.
Murillo Karam said he hoped the arrest of Salgado will bring new leads in the case.
The government is combing the hills of southern Guerrero state with horseback patrols and has divers looking in lakes and reservoirs behind dams, but has not found the youths missing since a confrontation with police Sept. 26 in the city of Iguala. Officers are suspected of turning the students over to the gang.
Authorities have arrested 36 police officers along with 17 alleged members of the gang.
Casarrubias didn't order the disappearances, but he knew about them and didn't object, Murillo Karam said. The suspect told authorities he spent a total of $45,000 a month in payoffs to police in Iguala and the neighboring town of Cocula, the attorney general said.
Iguala Mayor Jose Luis Abarca and his wife, Maria de los Angeles Pineda, are being sought for their presumed involvement in the disappearances, Murillo Karam said.
Activists in Guerrero hold out hopes that the missing youths are still alive and have pledged to blockade city halls across the state until they are found.
A caravan of more than 20 buses from the teachers college attended by the missing students joined other protesters from the state's teachers union in downtown Acapulco on Friday for the emotional but peaceful demonstration calling for authorities to resolve the case.