Mexico edged out Turkey last year to become the eighth most popular tourist destination in the world.
The record run has continued for the first quarter of 2017, according to the latest figures.
Some 9.3 million visitors bringing in $5 billion (4.6 billion euros) in revenue to Mexico have been recorded for the first three months of 2017.
"Tourism in our country is enjoying one of its best moments in history," said Gerardo Corona, of the federal Tourism Secretariat, Sectur, on Thursday. "Never has there been such a first quarter for the arrival of tourists at this level and in terms of revenue."
Last year saw a total of 35 million visitors to Mexico, an increase of 9 percent over the previous year, bringing in $19.6 billion in revenue, according to the World Tourism Organization (UNWTO).
That result brought Mexico close to world-ranked seventh place United Kingdom which had just 600,000 more visitors than Mexico in 2016.
"The New York Times" named Mexico City as the number one place to go in 2016 and "Conde Nast Traveler" named San Miguel de Allende the fifth best city in the world.
Corona credited the growth in tourism in Mexico to the government's policies in coordination with the state and city authorities and tourism operators to make Mexico "one of the world's major destinations."
Best performing markets were the Riviera Maya, Cancun, Los Cabos, Puerto Vallarta and Riviera Nayarit.
The federal Tourism Secretariat said it provided travellers with activities and attractions that encouraged them to extend their stay and generate more revenue as a result.
Most visitors to Mexico come from the US, followed by Canada, the UK, Argentina, Colombia, Spain, Brasil, Germany and France.
The number of visitors from the US increased by 12 percent last year over 2015, according to the UNWTO.
Sectur has expressed confidence that tourism revenues will overtake remittances from Mexicans working abroad in about three years' time.
In 2013, Mexico had fallen to 15th place in the world tourism list due to problems with security, most particularly with gang and street crime.
US President Donald Trump made a number of derogatory remarks about Mexico and Mexicans during his winning run to the White House last year.
Trump made a particular point of planning to build a border wall to separate the US from its southern neighbor.
Spring break planning: How to save time and money
The U.S. State Department is warning college students across the country not to spend spring break in certain parts of Mexico, where rampant crime has made travel dangerous for Americans.
The warning comes as students are finishing up midterm exams and heading out in search of warmer climes, salty margaritas and wild parties.
But Mexico, once among the most popular spring break destinations, is plagued with endemic levels of violence, according to the government.
“U.S. citizens have been the victims of violent crimes, including homicide, kidnapping, carjacking and robbery in various Mexican States," the State department travel warning stated.
The warning, which replaces one issued last April, specifically cautions travelers of the dangers in 14 of Mexico’s 31 states, including the popular spring break destinations of Baja California Sur, Guerrero and Nayarit.
“The state of Guerrero was the most violent state in Mexico in 2015 for the third year in a row, and self-defense groups operate independently of the government in many areas of Guerrero,” the warning says of the state that is home to the popular beachside city of Acapulco.
Armed members of these groups frequently maintain roadblocks and, although not considered hostile to foreigners or tourists, are suspicious of outsiders and should be considered volatile and unpredictable.
Acapulco has taken over from the northern border city of Ciudad Juárez to become one of the centers of Mexico's bloody drug war.
The city suffers from being a strategically located drug trafficking hub on Guerrero's Pacific coastal highway, while mass tourism simultaneously provides gangs with a profitable local market for drugs.