Russia's intelligence sources said he was shot during a raid on a hideout in Arguyn, 14 kilometres east of the Chechen capital, Grozny.
The Moscow-backed Chechen Prime Minister Ramzan Kadyrov, wearing combat fatigues, posed for television pictures next to a body identified as the rebel leader, whom he alleged had been planning an attack in Argun to coincide with the Group of Eight summit of leading industrialised nations due to take place in Russia's second city, St Petersburg, in mid-July.
Mr Kadyrov claimed his paramilitary police had been forced to kill Saydullayev when he resisted arrest.
A second separatist, a Russian intelligence agent and a policeman were also killed in the operation.
Chechen separatist envoy, Akhmed Zakayev, who lives in exile in Britain, denounced the killings as "political murders".
Saydullayev, an Islamic scholar, took over as leader when Russian forces killed Aslan Maskhadov in March last year.