He was arrested on August 7, 1980, in San Diego, California, United States, after delivering 205 grams of cocaine to an undercover DEA Agent. On December 4, 1993, he was arrested by the Mexican Federal Judicial Police in Tijuana, Baja California. He was incarcerated at the Almoloya de Juárez Maximum Security Prison near Toluca, Estado de México, on violations of illegal arms possession, drug charges, and complicity in the murder of Cardinal Juan Jesús Posadas Ocampo. Arellano Félix finished serving a 10-year sentence in 2004 for stockpiling illegal weapons, but was ordered held pending a final resolution of a U.S. extradition request. In May 2005 Mexican authorities transferred nine inmates, including Arellano Félix, from the Almoloya facility Penal del Altiplano (La Palma) to other facilities.
On September 16, 2006 it was reported that Arellano Félix was extradited to the United States, and on June 18, 2007 pled guilty to charges of conspiracy to distribute and possession with intent to distribute, cocaine.On February 2, 2008 Arellano Felix was released from a US prison in the city of El Paso, Texas and crossed to Mexican soil in the border city of Ciudad Juarez.