The militants were killed in a 56-day operation by police in the province, publicity department of Xinjiang said in a statement.
The hunt for the terrorists followed attack by "group of armed mobsters" on a coal mine in Baicheng county of Aksu prefecture on September 18 in which 11 civilians, three policemen and two para-police members were killed and 18 others injured, the statement said.
After the attacks on the mine the militants escaped into the mountains, state-run Xinhua news agency reported.
After the attack, police began a daily manhunt that involved more than 10,000 citizens and police searching an area of 1,300 square kms, the report said.
"By November 12, 28 members of the group had been killed during back and forth gun fights with police. One surrendered," it said.
The terrorist group was directly guided by an overseas extremists group and led by two local Xinjiang men named Musa Tohniyaz and Mamat Aysa, the statement said, adding the name of the organisation cannot be disclosed as investigations are still underway.
"In 2008, members of the group began watching videos containing messages of religious extremism, gradually reinforcing their extreme beliefs," the statement said.
Before they committed the killing, the group contacted overseas extremist organisations six times.
They contacted them again for guidance while on the run, it said.
"The overseas extremists gave orders and demanded they pledge allegiance," the statement said.
China says it is fighting terrorists in Xinjiang -- hundreds have died in attacks over the past three years.
Xinjiang is home to the mostly Muslim Uyghurs who complain of heavy-handed rule and ethnic discrimination under Chinese rule.
China alleges that separatist East Turkestan Islamic Movement, an Al-Qaeda affiliated outfit has become active in the province bordering Pakistan-occupied Kashmir and Afghanistan and carrying out violent attacks in Xinjiang and other parts of the country in which scores killed and injured.
China also alleges that ETIM fighters from Xinjiang also joined the Islamic State (Daesh) in Syria which also recently executed a Chinese national Fan Jinghui along the Norwegian national.