"There are at least 15 dead. The fight is under control. It seems there were firearms in the riot," said Manuel del Castillo, spokesman for the state government in Ciudad Juarez.
Red Cross workers at the scene told reporters that 15 inmates and two federal police officers were killed.
Ciudad Juarez, just across the border from El Paso, has become the worst flashpoint in President Felipe Calderon's two-year-old drug war. As drug gangs battle for control of turf and valuable trafficking routes to the United States, thousands of Mexicans have been killed, including 250 in Ciudad Juarez last month.
The government has sent thousands of troops into the city to clamp down on the violence, but the cartels are powerful, well-armed and aided by corrupt police.
The U.S. and Canadian governments have warned tourists to stay away from dangerous border cities this spring.
Additional troops have poured into Ciudad Juarez this week and the mayor's office said the army will take control of the local police force, prisons and traffic police from next week.
Police outside the prison, in the desert just outside of the city, said Wednesday's riot started after clashes erupted between rival factions of the local "Azteca" drug gang that works for the Juarez cartel.
Ambulances piled up to carry off casualties as plumes of brown smoke curled from the jail's windows.
Earlier, protesters burned mattresses on the roofs of cellblocks at the prison, home to some 1,200 inmates, as hundreds of troops and federal police in riot gear moved in with tear gas and helicopters circled overhead.
