
Local media report that neighbours became suspicious of the smell late on Thursday and called the police.
The crematorium had been closed for at least a year and some of the bodies were badly decomposed, police officials said.
It is not yet clear whether the bodies found on Friday were victims of organised crime.
The crematorium is in the state of Guerrero, 200km (124 miles) from the town of Iguala, where 43 students went missing in September.
Graphic photos of the crematorium show piles of bodies wrapped in dirty sheets on the floor of the building. Local media report that lime had been used over the bodies to try to disguise the smell.
They also suggest that one of the bodies may be a child, but this has not been confirmed.
"We can't say for now that there is an indication that organised crime participated in this but we can't rule it out," said Guerrero chief prosecutor Miguel Angel Godinez.
He told Radio Formula that experts were seeking to determine how long the bodies had been left inside the building.
Mr Godinez also said that some documents had been found in the property that "will allow us to conduct various lines of investigation".
He is expected to give more information at a press conference later this afternoon.
BBC/RI