One police officer also died in the shootout with armed civilians yesterday in the municipality of Tanhuato, in Michoacan state, near the border with Jalisco state, a federal government official told AFP.
The official said the dead included "42 suspected criminals and one federal police officer." Authorities had earlier reported the deaths of two officers.
Michoacan Governor Salvador Jara said the clash erupted when security forces stopped a suspicious vehicle, prompting its passengers to shoot.
A federal police commander told AFP that the convoy chased the shooters into a ranch known as El Sol, where the clashes continued. Some 500 federal police and troops were guarding the ranch.
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Jara said it was "very probable" that the Jalisco New Generation drug cartel was involved but that the attack was under investigation.
The New Generation cartel has launched deadly ambushes against police this year in Jalisco, but the identity or criminal affiliation of the armed civilians in yesterday's clash was not immediately known.
Michoacan and Jalisco have endured some of the worst violence in a drug war that began to escalate in 2006, when the government deployed troops to combat cartels.
More than 80,000 people have been killed and another 22,000 gone missing nationwide in the past nine years.
The western region poses one of the toughest security challenges facing President Enrique Pena Nieto since he took office in December 2012.