Economic complexity literature highlights the role of productive capabilities and industrial sophistication as central drivers of long-term development, yet most empirical evidence remains concentrated in a limited set of countries. This paper extends the debate by examining Mexico, a middle-income economy deeply integrated into global markets and characterized by stark regional disparities. Using data from the 2004 and 2019 Economic Censuses, we assess changes in manufacturing specialization and complexity across Mexican regions. The results show that while all regions increased their specialization and diversification, only those able to transition into more complex manufacturing industries expanded their share of national output—patterns consistent with findings for China, Italy, and Brazil. These findings underscore the importance of the quality of diversification, not just its extent, as a determinant of regional economic performance. More broadly, the Mexican case illustrates how integration into global value chains does not automatically guarantee convergence: sustained development depends on the accumulation of capabilities and upgrading into sophisticated activities. The study thus contributes to international debates on structural transformation, regional inequality, and the conditions under which emerging economies can leverage industrial complexity for inclusive growth.