The victims were apparently ambushed outside a water park in Teculutan, about 60 miles east of Guatemala City, said Interior Ministry spokesman Ricardo Gatica Trejo.
The area in Zacapa province is on a smuggling route for drugs heading from Colombia to the United States and officials said they had shut down border crossings with El Salvador and Honduras to prevent gunmen from fleeing the country.
"We believe it was a direct attack against these people," said Gatica Trejo, adding that those killed were heavily armed. "We think that drug traffickers were involved."
He said investigators recovered 10 automatic rifles, 10 handguns and two grenades from the crime scene. Police also found five abandoned cars, two that had been set ablaze.
Gatica Trejo said a 30-year-old Mexican man and six Guatemalans were among the dead. Two of the victims had been set on fire and were not identified.
He said police arrested three Mexicans and three Guatemalans who were carrying an arsenal of automatic rifles and grenades near the shootout. Investigators were trying to determine if those arrested were linked to the attack.
Gatica Trejo said more than 100 police officers were sent to the area to set up roadblocks and to guard the six suspects.