A SpaceX Starship prototype exploded while trying to land on Wednesday.
The incident occurred after an otherwise successful test launch from the company's rocket facility in Boca Chica, Texas.
The Starship rocket destroyed in the accident was a 16-storey-tall prototype of the heavy-lift launch vehicle being developed by billionaire entrepreneur Elon Musk's private space company.
It is designed to carry human beings and 100 tonnes of cargo on future missions to the Moon and Mars.
The self-guided rocket blew up as it touched down on a landing pad after a controlled descent. The test flight had been intended to reach an altitude of 12,496 metres, propelled by three of SpaceX's newly developed Raptor engines for the first time. But the company left unclear whether the rocket had flown that high.
Mr Musk said in a tweet immediately after the landing mishap that the rocket's "fuel header tank pressure was low" during descent, "causing touchdown velocity to be high".
He said that SpaceX had obtained all the data needed from the test and hailed the rocket’s ascent phase a success.
SpaceX made its first attempt to launch Starship on Tuesday, but a problem with its Raptor engines forced an automatic abort just one second before lift-off.
The complete Starship rocket, which will stand 120 metres tall when mated with its super-heavy first-stage booster, is the company’s next-generation fully reusable launch vehicle – the centre of Mr Musk’s ambitions to make human space travel more affordable and routine.
Nasa awarded SpaceX $135 million to help develop Starship, alongside competing vehicles from rival ventures Blue Origin, the space company owned by Amazon billionaire Jeff Bezos, and Leidos-owned Dynetcis.
The three companies are vying for future contracts to build the moon landers under Nasa’s Artemis programme, which calls for a series of human lunar explorations within the next decade.
Hawthorne, California-based SpaceX has been buying up residential properties in the Boca Chica village just north of the US-Mexico border in south-east Texas to make room for his expanding Starship facilities, which Mr Musk envisions as a future "gateway to Mars".