The killing was discovered on the same day that the global watchdog agency for endangered species said Thailand was facing an international wildlife trade ban unless it could rein in the ivory sector, which is a magnet for traffickers.
A ban would prevent the country trading anything appearing on the CITES list, including orchids and exotic wood, which are significant export products, Reuters reported.
Police investigating the death of Khlao are reported to be looking at three possibilities. The most likely theory is the one advanced by local elephant owners and keepers that the killers of the 4.9-tonne pachyderm were involved in some way with drugs.
The second theory focuses on ivory traders and the third points to elephant keepers.
Police questioned a former elephant keeper who had been fired from the Ayutthaya Elephant Palace and Royal Kraal where the poisoned elephant had been kept. The man lives near the elephant camp. He denied he had killed the animal or had been aware of the murder plot but he gave useful information about a local narcotics network, according to investigators.
Staff of the Ayutthaya Elephant Palace and Royal Kraal had chained Khlao near the Lop Buri River behind the elephant camp as it had been in rut.
It was killed with poison-coated bananas. Observers said the killers were inexperienced tusk thieves because experienced ones could cut tusks without having to drug an elephant.
Police are also looking for another former worker of the elephant camp who had resigned. He has a record for theft.
The incident was the first murder for elephant tusks in Ayutthaya.
The high profile of the Khlao killing is adding to pressure on authorities to tackle the illicit trade in ivory.
Khlao was probably the best known elephant in Ayutthaya. In addition to taking part in royal ceremonies, it was featured in Alexander, the 2004 film directed by Oliver Stone about the life of the ancient Greek general.
The Convention on International Trade in Endangered Species (CITES) has given Thailand an August 2015 deadline to fall into line or risk wide-ranging sanctions.
"There have been years without any real action on the ground when it comes to controlling the illegal ivory market," CITES chairman Oeystein Stoerkersen said in Geneva on Friday.
The country is under additional pressure to report back by January on steps to bolster recent laws on registering ivory importers, traders and legal stockpiles, which CITES claims are insufficient.
"Without that, Thailand will face a ban, and a suspension of all trade no matter what commodity it is, of the 35,000 species listed with CITES," said Mr Stoerkersen.
"I think that is a strong signal," he added.