Mexico's government was studying which international laws were being violated in order to file "the necessary lawsuits" because "there is indeed contamination," Sheinbaum told her morning news conference.
Last week, a SpaceX Starship rocket exploded during a routine ground test at the Starbase headquarters of Musk's space project on the south Texas coast near the Mexican border.
The explosion -- which sent a towering fireball into the air -- was the latest setback to Musk's dream of sending humans to Mars.
Mexican officials are carrying out a "comprehensive review" of the environmental impacts of the rocket launches for the neighboring state of Tamaulipas, Sheinbaum said.
The US Federal Aviation Administration approved an increase in annual Starship rocket launches from five to 25 in early May, stating that the increased frequency would not adversely affect the environment.
The decision overruled objections from conservation groups that had warned the expansion could endanger sea turtles and shorebirds.
A lawsuit would be the latest legal tussle between Mexico and a US corporate giant.
In May, Sheinbaum's government said it had sued Google for renaming the Gulf of Mexico the "Gulf of America" for Google Maps users in the United States following an executive order by President Donald Trump.
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