When Ovidio Guzmán López was seized at a house on a judge's warrant in the city of Culiacán, cartel gunmen fought street battles with security forces.
At least eight people were killed and 16 wounded, the authorities say, with vehicles left burning in the streets.
President Andres Manuel Lopez Obrador said the decision to cancel the arrest on Thursday had saved lives.
Senior security officials had decided on his release, the president said at a news conference. "The officials who took this decision did well," he said.
"The capture of a criminal is not worth more than people's lives."
Mr López Obrador was elected on a platform of cracking down on Mexico's drug cartels, and has tasked the National Guard, a new security force, with fighting the dealers.
Under El Chapo's leadership, the Sinaloa cartel was the biggest supplier of drugs to the US, officials say.
The kingpin was jailed earlier this year, and Ovidio Guzmán Lopez is one of several brothers with a hand in running the cartel.
Thought to be in his twenties, he is accused of drug trafficking in the US.
Friday, October 18, 2019
"Mexican president says police 'did right' to free drug lord's son"