With about 70 percent of votes counted, left-wing candidate Andres Manuel Lopez Obrador now has a slight lead over his conservative rival, Felipe Calderon.
Mr Lopez Obrador had earlier refused to accept a preliminary count that gave Mr Calderon a narrow advantage and demanded a recount.
It could be weeks before a final tally is determined and many observers believe the issue could go all the way to the federal electoral court.
Mr Lopez Obrador has urged electoral authorities to be thorough in the recount, which is expected to last a day.
The latest recount figures on Wednesday gave Mr Lopez Obrador 36.87 percent compared to 34.56 percent for Mr Calderon but electoral officials say it is too soon to predict the final outcome.
He said the results had "many inconsistencies" and his party claimed some voting places were counted twice while others were not counted at all.
Left-wing demonstrators gathered in Mexico City's huge Zocalo square outside the Federal Electoral Institute (IFE) building where the recount results were being announced.
Several protesters tried to break down the gates to the IFE offices but were stopped by fellow demonstrators.
The prospect of lengthy legal battles and street protests over the results has raised fears of unrest in Mexico that is key to US interests in relation to drugs, immigration and security.
The IFE is due to announce a president-elect on Sunday and the Federal Electoral Tribunal, the ultimate arbiter of disputes, would then consider any formal complaints.