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Despite playing for more than half an hour with 10 men following the dismissal of Jarell Quansah in the 54th minute, the Three Lions progressed thanks to a superb brace from Jude Bellingham (36, 38) and a Harry Kane penalty (60). Julián Quiñones (42) and Raúl Jiménez (69, penalty) scored for Mexico.
England will face Norway in the quarter-finals in Miami on Saturday after the Norwegians defeated Brazil 2-1 earlier in the day.
England wrote a "special chapter", as head coach Thomas Tuchel described it, at a stadium where the nation famously suffered heartbreak against Argentina in the 1986 World Cup quarter-finals, when the late Diego Maradona scored his infamous 'Hand of God' goal in a match Gary Lineker and his team-mates ultimately lost.
Mexico entered the contest with an outstanding record at the Estadio Azteca, having lost only twice in 89 international matches there before this defeat.