Castaneda said gunmen blocked streets with burning vehicles to make it hard for security forces to manoeuvr. "We put together a really talented team of in-country people and our guys here in the states".
A large group of inmates escaped from the city prison.
Five attackers, a member of the National Guard, a civilian and a prisoner died in the gunbattles, Defence Secretary Gen. Luis Cresencio Sandoval said.
Mexican President Andres Manuel Lopez Obrador, who came to power promising to crack down on the drug cartels, is expected meet his security cabinet to discuss the situation.
Cristobal Castaneda, head of security in Sinaloa, said that at least two people were killed and at least 21 other people were injured at the time of the report. People cowered in shopping centers and supermarkets and black plumes of smoke rose across the skyline. "Not only did they get the government to release Ovidio, they demonstrated to the citizens of Culiacan as well as the rest of Mexico who is in control".
Falko Ernst, senior analyst for the International Crisis Group in Mexico, said the release of Ovidio Guzman set "a risky precedent" and sent a message that the state itself, including the army, could be blackmailed and was not in control.
Still, questions about how the release was handled continued circulating after defense minister Sandoval said nine security personnel were "held and freed without injury".
"The capture of one criminal can not be worth more than the lives of people", Lopez Obrador said, adding that the cartel became "very violent" and put many lives at risk.
According to a Friday Reuters report, authorities arrested Guzman Lopez but shortly afterward released him to armed cartel members.
A trenchant critic of past administrations, Lopez Obrador said previous government strategies had turned Mexico into a "graveyard" and that his critics wanted him to continue with it. "It sends them the message that if they capture a member of the cartel, all they have to do is go in the city and intimidate the citizenry and security forces".
"In order to protect the greater good, the people of Culiacan's safety and well-being, the (federal government's) security cabinet made a decision to suspend said actions", Durazo said in a video message.
However, murders this year are set to reach a record high.
The scenes in Sinaloa comply with the bloodbath of greater than a dozen police in western Mexico earlier this week, and the killing of 14 suspected gangsters by the military a day later.
Images on social media appeared to show the terror unleashed on the inhabitants of Culiacan.
In 2015 he dramatically escaped from prison, riding on a motorcycle through a tunnel that had been dug to his cell at the Altiplano maximum security federal prison.
Recaptured drug lord Joaquin "El Chapo" Guzman is escorted by soldiers at the hangar belonging to the office of the Attorney General in Mexico City, Mexico, on January 8, 2016.
The elder Guzman is serving a life sentence in the USA after being convicted last February of industrial-scale drug trafficking.
But Ovidio Guzman was indicted in 2018 by a grand jury in Washington, along with a fourth brother, for the alleged trafficking of cocaine, methamphetamine and marijuana.