Investigators exhumed the remains of 31 men and one woman from a hillside in Zitlala, where turf wars between rival criminal gangs are common.
"The discoveries are terrible" a security spokesperson said, while the search for any additional hidden graves continued in the region.
No arrests have been made so far.
The remains were found in 17 different pits near the village of Pochahuixco between Tuesday and Thursday.
State security spokesman Roberto Alvarez told the AFP news agency the graves had been discovered following an anonymous tip, which led to the discovery of a kidnap victim.
AFP also reported that four heads were found "inside a cooler".
The town lies in the state of Guerrero, which has a very high rate of violent crime, and is also a significant opium producer.
It reported more than 1,800 homicides between January and October this year.
Residents in another town, Tixtla, discovered nine decapitated bodies earlier in the week. Investigators are checking if the remains match the heads discovered in Pochahuixco.
The remains have been sent to the state capital to be identified.
Mexican authorities have discovered 32 bodies and nine heads hidden in mass graves in a southern region plagued by violence from drug cartels.