Lucio Morrone, 53, aka ‘Spalluzzella’, was detained on a European Arrest Warrant on Monday in a joint operation between the Civil Guard and Italian Carabinieri.
He fled Italy five years ago and had been living under an assumed name in the popular resort of Benalmadena in southern Spain.
Morrone appears on a list of 100 Most Wanted Italian fugitives and was wanted for crimes related to drug trafficking and "involvement in criminal mafia activity".
In a statement released by Spain’s Civil Guard he was described as "the head of a dangerous clan of the Neopolitan Camorra".
Morrone is thought to be the leader of the "Teste Matte" (Crazy Heads) criminal organization which ran illicit operations in Naples’ Spagnoli area.
The arrest came just days after another Italian crime boss was arrested just a few miles along the coast in San Pedro de Alcántara.
Carlo Leone, a member of the Naples’ Elia clan was involved in international drug trafficking.
Undersecretary of Defense Gioacchino Alfano praised Naples' carabinieri on the operation.
"Once again, legality and justice have prevailed over deceit and criminality," Alfano told Italy’s Ansa agency.
"For this umpteenth success I congratulate the Naples police and investigative teams, who have shown that they never give up," he said.