Father Juan Ramon Hernandez held the sermon in a church in Acatlan, preaching against the killings caused by local drug gangs.
Children were said to be giggling as the water was being sprayed.
Hernandez said: "Let's pray to change the heart of the people who use violence and kill other people. Let's throw all the guns far away."
A record water gun fight recently took place in Thailand, with 3,477 people participating.
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Watch a news report of Father Hernandez using a water gun below: