We take advantage of a relatively dense network of seismic stations in the Guerrero segment of the Mexican subduction zone to study seismicity and state of stress in the region. We combine our results with recent observations on the geometry of the subducted Cocos plate imaged from receiver function (RF) analysis, an ultraslow velocity layer mapped in the upper crust of the subducted slab, and episodic slow slip events (SSEs) and nonvolcanic tremors (NVTs) reported in the region to obtain a comprehensive view of the subduction process. Seismicity and focal mechanisms confirm subduction of the Cocos plate below Mexico at a shallow angle, reaching a depth of 25 km at a distance of 65 km from the trench. The plate begins to unbend at this distance and becomes horizontal at a distance of ∼120 km at a depth of 40 km. Some of the highlights of the inslab seismicity are as follows: (1) A cluster of earthquakes in the depth range of 25–45 km, immediately downdip from the strongly coupled part of the plate interface, revealing both downdip compressional and extensional events. This seismicity extends from ∼80 to 105 km from the trench and may be attributed to the unbending of the slab. (2) The slab devoid of seismicity in the distance range of ∼105–160 km. (3) Sparse inslab seismicity revealing downdip extension in the distance range of 160–240 km. The NVTs are also confined to this distance range. The episodic SSEs occur on the horizontal segment, in the distance range of ∼105–240 km, where an ultraslow velocity layer in the upper crust of the slab has been mapped from waveform modeling of converted SP phases. Thus, in the distance range of ∼105–160 km, SSEs occur but NVTs and inslab earthquakes are absent. This suggests that metamorphic dehydration reactions in the subducting oceanic crust and upper mantle begin at a distance of ∼160 km, giving rise to both the inslab earthquakes and NVTs. No inslab earthquake occurs beyond 240 km. The receiver function images and P wave tomography suggest that the slab begins a steep plunge at a distance of ∼310 km, reaching a depth of 500 km around 340 km from the trench. The negative buoyancy of such a slab should give rise to large extensional stress in the slab. Yet inslab seismicity is remarkably low, which may be explained by a slab that is not continuous up to a depth of 500 km, but is broken at a shallower depth. The resulting slab window may permit subslab material to flow through the gap. This may provide an explanation for the recent rift‐related basalts found near Mexico City. The fore‐arc, upper plate seismicity, which during the period of study (1995–2007) consisted of a moderate earthquake (Mw5.8) near the coast (H = 12 km), its numerous aftershocks, and two shallow events farther inland, demonstrates a trench‐normal extension in the upper plate near this convergent margin, a state of stress that may be explained by tectonic erosion and/or seaward retreat of the trench. Seismicity, location of the mantle wedge, and rupture areas of Mexican earthquakes suggest that the downdip limit of rupture during large/great earthquakes in Guerrero may be 105 ± 15 km. Shallow‐dipping, interplate thrust earthquakes are not the only type of events that affect the seismic hazard in the region. The magnitudes of inslab downdip compressional and extensional earthquakes that occur within ∼20 km inland from the coast, in the depth range of 25–45 km, may reach 6.5 and 7.5, respectively. In addition, we now identify normal‐faulting earthquakes in the upper plate. These sources need to be taken into account in the hazard estimation.