From 1973 to 1975, Camarena served in the United States Marine Corps, after which he joined the DEA, at their Calexico, California, office. In 1977, Camarena moved to the agency's Fresno office, and in 1981, he was assigned to their Guadalajara office in Mexico.

In 1984, acting on information from Camarena, 450 Mexican Soldiers backed by helicopters destroyed a 1,000-hectare (≈2,500 acres) marijuana plantation with an estimated annual production of $8 billion known as "Rancho Búfalo". Camarena, who had been identified as the source of the leak, was abducted in broad daylight on February 7, 1985, by corrupt police officers working for drug lord Miguel Ángel Félix Gallardo. Camarena was tortured at Gallardo's ranch over a 30-hour period, then murdered. His skull, jaw, nose, cheekbones and windpipe were crushed, his ribs were broken, and a hole was drilled into his head with a power drill. He had been injected with amphetamines and other drugs, most likely to ensure that he remained conscious while being tortured. Camarena's body was found in a rural area outside the small town of La Angostura, in the state of Michoacán, on March 5, 1985.

Despite vigorous protests from the Mexican government, Álvarez was brought to trial in Los Angeles in 1992. After presentation of the government's case, the judge ruled that there was insufficient evidence to support a guilty verdict, and charges were dropped. Álvarez subsequently initiated a civil suit against the U.S. government, charging that his arrest had breached the U.S.-Mexico extradition treaty. The case eventually reached the U.S. Supreme Court, which ruled that Álvarez was not entitled to relief. The four other defendants, Vásquez Velasco, Juan Ramón Matta-Ballesteros, Juan José Bernabé Ramírez, and Rubén Zuno Arce (a brother-in-law of former President Luis Echeverría), were tried and found guilty of Camarena's kidnapping.

In October 2013, two former federal agents and a self-proclaimed ex-CIA contractor told an American television network that CIA operatives were involved in Camarena's kidnapping and murder, because he was a threat to the agency's drug operations in Mexico. According to the three men, the CIA was collaborating with drug traffickers moving cocaine and marijuana to the United States, and using its share of the profits to Finance Nicaraguan Contra rebels attempting to overthrow Nicaragua's Sandinista government. A CIA spokesman responded that “it's ridiculous to suggest that the CIA had anything to do with the murder of a U.S. federal agent or the escape of his killer.”