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Mohamad Eshtewi’s body was found dumped in the street after he was kidnapped after leaving the airport in the western coastal city late on Sunday, the source said.
The city hospital said it had received the mayor’s body bearing gunshot wounds.
His brother was with him in the car and was wounded in the attack, the security source said.
Eshtewi was returning from an official visit to Turkey with other members of the city council, who were all elected in 2014 for four years.
UN envoy for Libya Ghassan Salame on Twitter denounced the killing and expressed his “profound sadness” at the news.
The Tripoli-based Government of National Accord deplored a “cowardly” and “terrorist act” that killed a “symbol of moderation and tolerance”, vowing that those responsible would be brought to justice.
France’s foreign ministry said the killing confirmed “the urgency for a political solution” to the political and security problems plaguing the North African country.
Britain’s ambassador to Libya, Peter Millett, said he was “deeply saddened by (the) senseless murder” of Eshtewi.
“He worked hard to serve his people,” Millett said on Twitter.
Home to some 400,000 people, Misrata is considered one of Libya’s safest cities.
Its powerful militias played a major role in expelling the Islamic State group from the coastal city of Sirte last year.
In October, four people were killed in a suicide bombing claimed by IS at the main court building in Misrata.
Libya has been wracked by chaos since the 2011 uprising that toppled and killed longtime dictator Moamer Kadhafi, with rival authorities and militias vying for control of the oil-rich country.
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