Maria Angela Di Trapini is accused of filling in for her husband, Salvatore Madonia, who is serving a life sentence for the murder of anti-Mafia businessman Libero Grassi.
She was caught in a sting on Tuesday involving more than 200 police officers, helicopters and sniffer dogs.
Di Trapini spent seven years in prison for relaying her husband’s orders from behind bars to the rest of the Madonia clan.
The 49-year-old also ensured the families of imprisoned mobsters received financial support.
Authorities claim wiretaps prove that since Di Trapina was freed two years ago, she has worked her way up from being a lowly messenger to the boss and was liaising with other clans on the relaunch of the Cosa Nostra crime group.
In one recording, police claimed a suspected clan member referred to her as “the mistress of the house”.
One informant told investigators “for all intents and purposes, she acts like a real man”, according to court papers.
“Once released she immediately returned to Cosa Nostra and took up a decisive role,” prosecutor Salvo De Luca said.
A further 24 people were also arrested along with Di Trapina in the Sicilian capital of Palermo, accused of being Mafia members, handling stolen goods, extortion and vandalism.
The arrests “reveal how Cosa Nostra, though weakened by investigations and trials, still has an enduring capability to use intimidation to force businesses to pay pizzo (the Mafia tax)”, police said in a statement.
Despite the extreme conditions under which Madonia is being held in prison, Di Trapani fell pregnant with his child in 2000.
Her rise followed the death of Riina, one of Sicily’s most notorious Mafia bosses who was nicknamed The Beast during his time in charge of Cosa Nostra because of his ruthless cruelty.
Among the most brutal killings he ordered was of a 13-year-old boy who was kidnapped to stop his father telling Mafia secrets. The teenager was strangled and dissolved in acid.