Giuseppe Pelle, who has been on the run since 2016, is considered the head of the powerful Pelle-Vottari clan and is a member of the 'Ndrangheta's "La Provincia" ruling council.
Police said in a statement that Pelle was arrested on Thursday night after 50 officers swarmed under the cover of darkness on the safe house where he had holed up near the tiny village of Condofuri, in the southern region of Calabria.
The mobster boss was evading a two-and-a-half year prison sentence for mafia association and attempted extorsion.
In July last year he was hit by an order for pre-trial detention for having tried to obtain the proceeds from public works in towns surrounding the city of Reggio Calabria.
Pelle, 57, is the son of Antonio Pelle, the 'Ndrangheta organisation's top dog until his death in 2009.
His Pelle-Vottari clan is one of two from the village of San Luca involved in a bloody feud with the the Nirta-Strangio clan.
That conflict came to international attention in 2007 following the "Duisburg Massacre" in which six people were murdered in the German city.
Maria Strangio, the wife of rival clan leader Giovanni Nirta, had been murdered on Christmas Day in 2006.
The feud was blamed for at least 16 deaths in total.
The 'Ndrangheta is made up of numerous village and family-based clans in Calabria, the rural, mountainous and under-developed "toe" of Italy's boot.
Despite intense police attention and frequent arrests the organisation has continued to extend its reach.
It has surpassed Sicily's Cosa Nostra and the Naples-based Camorra in influence thanks to its control of the cocaine trade, according to Italy's former most senior anti-Mafia prosecutor Franco Roberti.