Gunmen carrying assault rifles arrived in trucks and opened fire on the partygoers, according to local media. A total of 14 people were shot dead at La Playa nightclub in Salamanca. A further seven were injured as the gunmen sprayed bullets into the crowd in the early hours of Saturday morning.
Armed police and soldiers scrambled to the scene.
Paramedics battled to save some of the victims.
The injured survivors were rushed to hospital.
A search for the gunmen has been launched.
Home to around 260,000 people, Salamanca is in the state of Guanajuato, northwest of the capital Mexico City.
Earlier this week, Guanajuato’s governor, Diego Sinhue Rodriguez Vallejo, celebrated the results of a security plan, called Golpe de Timon, which targeted the notorious Santa Rosa de Lima drug cartel.
The cartel has been blamed for much of the lethal brutality that made Guanajuato the most violent state in Mexico last year.
It is based in the central town of Santa Rosa de Lima, a few miles east of Salamanca, home to one of the country’s main oil refineries.
The latest crackdown involving federal and state authorities led to seven arrests and six kidnap victims being rescued, Mr Vallejo said.
Authorities have also seized property and frozen bank accounts linked to the cartel.
This week, they said the cartel paid Santa Rosa residents to block roads with burning cars to stop marines and federal police from closing in on them.