If I leave the U.S. with an expired H1B can I re-enter the U.S.

Several things aren't clear from your question, and you need to speak with an attorney. You say that you applied for an extension of your H-1B before it expired - good: this protects your status here and allows you to remain and continue working. However, you would need approval of the extension (with the replacement I-94 at the bottom with extended validity dates) to reenter the U.S. on the H-1B. You say you have an I-797 Notice of Action form good through 2009 - do you mean that the H-1B extension has already been approved? This isn't clear to me. If you have an earlier H-1B stamp which is still valid (this is unlikely, but not impossible), you could use this stamp and the approved H-1B extension Approval Notice to reenter - otherwise you would need to get a new H-1B stamp while abroad (the U.S. posts in Mexico have discretion to handle visa stamp applications from people who aren't citizens of Mexico - they don't have to accept your application - but as long as you have never been without status in the U.S. they will likely process it), You say that your I-140 is approved, but this does not in itself grant any immigration status. What isn't clear from your question is whether an I-485 Application to Adjust Status is on file, and if so whether this is pending and whether you also have a valid Parole document and Employment Authorization document. Since you are on an H-1B, you could leave the U.S. reenter on an H-1 without endangering the Adjustment of Status once the H-1B extension is approved - but if is not yet approved, you could also use a Parole document to reenter without having to get a stamp.

Provided you are not a citizen of Cuba, Iran, Sudan, or Syria, you should be eligible to visit Mexico for less than 30 days and re-enter the United States withOUT obtaining a new travel visa, that is, you retain your existing I-797 with I-94 card when you leave and re-present the same I-797 with I-94 card when you re-enter the US. Of course, I assume that you have researched whether you require any kind of visitor's visa to ENTER Mexico. This automatic extension of validity at ports-of-entry is discussed in the US Dept of State's regulations at 22 CFR 41.112(d), linked here: http://edocket.access.gpo.gov/cfr_2002/aprqtr/pdf/22cfr41.112.pdf At 22 CFR 41.112(d)(2), it states that re-validation is possible when.... (i) the foreign national is in possession of an unexpired I-94 card; and (ii) is applying for re-admission after a trip to a contiguous territory (Canada or Mexico) after an absence not exceeding 30 days; and (iii) has maintained and intends to resume non-immigrant status; and (iv) is applying for readmission within the authorized period of time; and (v) is in possession of a valid passport; and (vi) does not require authorization for admission under INA 212(d)(3) [basically a provision barring bad guy terrorist types]; and (vii) has not applied for a visa while abroad; and is not a citizen of a state sponsor of terrorism. State Sponsors of Terrorism: http://www.state.gov/s/ct/c14151.htm Now, you may be able to apply for an H-1B visa as a third country national (TCN) at a US consulate in Mexico, but based on the above, it may be possible for you to travel to Mexico for less than 30 days and re-enter. To take advantage of this provision of law, you should probably speak to the attorney who is presumably handling your immigration case, as presumably you had a lawyer help with the H-1B, H-1B extension, PERM and I-140. This attorney would be in the best position to advise on the travel request.

If you do not want to attempt the procedure described above, namely trying to be readmitted on your existing I-94 and approval notice without a new visa, based on brief travel to Mexico, then you will need to schedule a visa appointment , which often requires considerable advance notice - but as noted by Stu above, you can only obtain a new H-1B visa stamp at a US Embassy or consulate in Mexico if your previous H-1B visa was issued in your home country. I would strongly recommend that you consult with an immirgation attorney in person, so they can review your documents and discuss your situation in depth. It is also important to understand the difference between an I-94 or I-797 approval notice with a replacement I-94, which are status documents, and a machine-readable visa stamp in your passport, which is an entry document.