Mexico City is located in Mexico.
Lake Texcoco ( Lago de Texcoco ) was a natural lake within the Anáhuac or Valley of Mexico . The entire lake basin is now almost completely occupied by Mexico City , the capital of the present-day nation of Mexico . Mexico City . The city was responsible for generating 15.8 % of Mexico 's Gross Domestic Product and the metropolitan area accounted for about 22 % of total national GDP . The city was originally built on an island of Lake Texcoco by the Aztecs in 1325 as Tenochtitlan , which was almost completely destroyed in the 1521 siege of Tenochtitlan , and subsequently redesigned and rebuilt in accordance with the Spanish urban standards .