In 2006, Mexico’s government began a crackdown against drug cartels and adopted a strategy of leadership decapitation—removing cartel leaders. Soon after, large drug cartels began fragmenting and dozens of splinter cartels proliferated. While the violent consequences of leadership decapitation and the increasing number of cartels have received considerable attention, cartel fragmentation itself remains understudied. We argue that drug cartels diversifying their activities and expanding geographically following the government crackdown created conditions conducive to fragmentation: It gave potential defectors access to illicit markets (means) and distance from cartel strongholds (opportunity). Leadership decapitation then served as a catalyst (motive) for fragmentation. To test our theory, we create an original qualitative dataset on the population of cartels in Mexico from 2000–2018. First, we find that all splinter cartels controlled specific illicit markets before fragmenting that allowed them to operate independently upon defecting. Second, we find that while large splinter cartels sometimes fragmented near the stronghold of their originating cartel, smaller splinter cartels only fragmented when they operated far from the stronghold of their originating cartel, safeguarding them from retaliation. Additional results show that leadership decapitation reduced the average tenure of cartel leaders and increased the number of hitmen leading cartels.