The interior of the house in the Gulf coast city of Veracruz was completely burned, and its facade was riddled with bullet holes. Inside, police found the bodies of municipal police commander Jesus Antonio Romero and his family, Veracruz state Public Safety Secretary Sergio Lopez said.
Police said the youngest was a 6-year-old boy and the oldest was a 15-year-old girl.
The motive was unclear but the pre-dawn attack bore hallmarks of Mexico's brutal drug cartels. Lopez said police believe the assailants set fire to the house by hurling grenades. He said neighbors reported hearing explosions.
"A family was sleeping peacefully when this assault occurred," Lopez said. "The house had wood paneling, and that's why the fire spread quickly and kept the young people from escaping."
Romero, 39, was promoted a month ago to deputy operations coordinator for the Veracruz-Boca del Rio area, a hotbed of drug violence and a stronghold of the Zetas, a group of hit men aligned with the Gulf cartel.
It was unclear if the Romero and his family were killed by gunfire or the fire.
Mexico's drug war has claimed more than 11,000 lives since President Felipe Calderon deployed tens of thousands of soldiers and federal police nationwide to fight the cartels. Drug gangs have stepped up attacks on police and government officials, often gunning them down in front of their homes - but it is rare for their families to be targeted.
In a separate attack, a federal agent who had been investigating the killing of a Mexican journalist was shot dead Tuesday night at his home in the northern border city of Ciudad Juarez, said Vladmir Tuexi, a spokesman for the regional prosecutor's office.
Jose Ibarra had been investigating the death of Armando Rodriguez, a crime reporter for the newspaper El Diario who was killed Nov. 13. Investigators said they did not know if the two killings were related.
Ciudad Juarez, across the border from El Paso, Texas, is one of Mexico's most violent cities, with more than 800 people killed this year.
In one of the boldest offensives against the government, 18 federal agents were killed earlier this month in a series of attacks in western Mexico blamed on La Familia drug cartel. Authorities say La Familia was retaliating for the arrest of one of its top members.
The federal government responded by sending 5,500 federal police, soldiers and navy personnel to western Michoacan state and stepping up its offensive against La Familia, which has turned to large-scale methampthetamine production.
On Wednesday, Federal Police announced the capture of six more suspected La Familia members, including a man accused of being a chief financial operator.
The arrests came a day after soldiers seized almost a half-ton of crystal methamphetamine in raids on two drug rural laboratories in Michoacan. Authorities have raided at least 40 drug labs in Michoacan this year, including 19 in the last 10 days.