British canoeist Emma Kelty was tortured and raped as she died after being shot, villagers have claimed.
The full details of the adventurer's last moments were revealed in a confession by one of the suspects hours after the attack.
Ringleader Evanilson Gomes da Costa, 24, died Wednesday after being shot by rival gangsters.
And one local who knows da Costa - known by his nicknamed Baia - said the gangster spoke to him in the early hours of the morning following Kelty's death last Wednesday night, revealing what they had done.
The man, who didn't want to be named, said: "He said he was one of four men. The woman had put up her tent on the beach in exactly the area where the Colombia drug traffickers go through, and which is crawling with pirates who wait for them to arrive to attack.
"These men aren't pirates though, they are just drug users. We are all shocked that these men from our community did such a terrible thing to this woman.
"When the men saw her tent they thought it belonged to a Colombian with drugs, so they started firing from about 50 metres away. The woman was hit in the arm. She started waving frantically and screaming for help."
He said that when the four men saw that she was a woman they attacked her and, still believing she was carrying drugs, cut off her hair with a knife while demanding to know where the drugs were.
According to the man, one of the group then slit her through with the knife, before all four men "sexually abused her".
He said they then dragged her body to the river and dumped it in the fast-moving water.
He said: "The men fled into the forest after we all found out what they had done. We provided the police with the details and their identities. We're all disgusted by what they have done."
The former teacher wrote an eerie message predicting her own death just days before her bullet-riddled body was found in a remote and lawless stretch of river, deep in the heart of the rainforest.
Two days later, she tweeted that she was OK - just hours before coming face-to-face with a group of thugs hiding around a corner.
Yesterday the chief police officer in Coari, Jose Afonso Barradas Junior, also revealed that one of the suspects, Artur Gomes da Silva, had confessed to slitting the former headteacher's throat.
He was arrested yesterday after an anonymous tip-off.
And Barradas Junior also revealed how the "stupid" gangsters unwittingly alerted authorities to their crime after accidentally triggering a distress signal on her GPS device, police said today.
Investigators had first thought the emergency alert which pinpointed Emma Kelty's exact location and triggered a search operation by Brazil's Navy had been sent by the victim herself.
But in fact the 'SOS' button was pressed by one of her killers who was trying to work out how to use the device they had stolen, an hour and a half after her death.
Police have now recovered the GPS device, as well as a mobile phone and a memory card, which the gang of seven 'pirates' sold to local villagers after killing her.
The GPS signal sent at 10pm last Wednesday night led investigators to the riverside village of Lauro Sodre, 150 miles west of Manaus, and a manhunt which has brought about the arrest of three men accused of her murder.
A fourth man was killed yesterday in an unrelated gangfight, and three brothers are still on the run.
Yesterday Coari police chief Jose Afonso Barradas Junior said he doubted anyone would have discovered what happened to Kelty if the "stupid" gangsters hadn't set off her emergency locator by mistake.
He said: "They didn't know how it worked, so were messing around with it and pushing buttons.
"One of them must have pushed the button which transmitted an alert that she was in trouble. In turn the company that received it alerted the Navy, along with the exact location of where the button was pushed.
"Without that, it would have been very difficult to know where in this vast area of jungle she had gone missing.
"It would have probably remained an unsolved mystery and her killers never brought to justice.
"The place where she disappeared is a very complicated area, it's difficult to access and there are no telephones or mobile signal. The criminals thought they could kill her in impunity, but then they stupidly pressed the only button which could have turned them in to the police."
Barradas Junior added that some of the locals who bought Kelty's stolen items from the pirates later hid them in the forest after finding out who they belonged to.
He said: "They were afraid that they could be arrested for being in possession of stolen property.
"But they later took police to the places where they had hid them so the items could be recovered."