The finding initially stunned the researchers, however, upon closer inspection the skulls were found to be human skulls warped into strange, alien-like shapes.
Scientists said the practise of deforming skulls of children as they grew was common in Central America, and these findings suggest the tradition spread farther north than had been thought.
The cemetery was discovered by residents of the small Mexican village of Onavas in 1999 as they were building an irrigation canal, 'LiveScience' reported.
The site, referred to as El Cementerio, contained the remains of 25 human burials. Thirteen of them had deformed skulls, which were elongate and pointy at the back, and five had mutilated teeth.
Dental mutilation involves filing or grinding teeth into odd shapes, while cranial deformation involves distorting the normal growth of a child's skull by applying force.
"Cranial deformation has been used by different societies in the world as a ritual practise, or for distinction of status within a group or to distinguish between social groups," said researcher Cristina Garcia Moreno, an archaeologist at Arizona State University.
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"The reason why these individuals at El Cementerio deformed their skulls is still unknown," said Garcia.
"The most common comment I have read from people that see the pictures of cranial deformation has been that they think that those people were 'aliens'.
I could say that some say that as a joke, but the interesting thing is that some do think so. Obviously we are talking about human beings, not of aliens," Garcia added.
Of the 25 burials, 17 were children between 5 months and 16 years of age. The high number of children seen at the site could suggest inept cranial deformation killed them due to excessive force against the skull.
Researchers suggest the people at El Cementerio had been influenced by recent migrants from the south.
However, it remains uncertain why some of these people were buried with ornaments while others were not, or - another mystery - why only one of the 25 skeletons was woman.