A law enforcement official says the bodies were found on roadsides in two groups.
The official was not authorized to be quoted by name and spoke on condition of anonymity.
Three bodies were dumped on the side of the main highway that runs through the city.
They had been bound and their faces covered before being shot.
Four more bodies were found in similar circumstances in a rural area on the outskirts of the city, which is capital of Guerrero state, which has been plagued by drug gang turf battles, opium poppy plantations, land disputes, illegal logging and a host of other conflicts.
The operation is based in the city of Chilapa, where two drug gangs have been fighting bloody turf battles for years.
Dozens of local residents have disappeared and are believed to have been kidnapped or killed in the area.