SpaceX's Starship entered space for the first time after a launch from a Texas pad on Saturday, but no data was recovered after it reportedly blew up.
The Starship rocket system, consisting of a booster and the Starship craft, blasted off from Boca Chica, Texas, on its second test flight.
It reached further than the first attempt in April, with the booster separating successfully, but it also exploded moments after.
SpaceX founder Elon Musk was in mission control to monitor the launch.
The company said the goal was to send the spacecraft to a suborbital trajectory, but it is not clear yet what altitude it managed to reach.
Saturday's test was meant to show Starship's ability to reach orbit before SpaceX begins commercial operations.
What happened with the first attempt?
The first orbital launch attempt failed because of a technical issue.
Engineers had to deliberately blow up the rocket mid flight when the second stage failed to separate from the booster.
Chunks of Starship tumbled back to Earth after engineers ordered a “rapid unplanned disassembly” – a process that automatically disintegrates the rocket.
It reached a peak altitude of 39km over the Gulf of Mexico when the mishap took place.
Mr Musk had said at the time that the flight still gave them “plenty of data” to try again.
'Starship’s first flight test provided numerous lessons learnt that directly contributed to several upgrades to both the vehicle and ground infrastructure to improve the probability of success on future flights," SpaceX said.
"The second flight test will debut a hot-stage separation system and a new electronic thrust vector control (TVC) system for Super Heavy Raptor engines, in addition to reinforcements to the pad foundation and a water-cooled steel flame deflector, among many other enhancements."
SpaceX said that technologies are already used in its Falcon rocket, Dragon capsule and Starlink satellites.
Elon Musk hopes to make life multiplanetary
SpaceX claims that Starship is the most powerful launch vehicle yet developed.
It is able to produce 3,991 tonnes of thrust, which is 15 per cent more than Nasa’s Apollo Moon rocket Saturn V.
The company has been contracted by Nasa to develop the Starship Human Landing System, which will one day help astronauts land on the Moon under the US space agency’s Artemis programme.
But Mr Musk's long-term goal is to eventually send astronauts to Mars using his Starship fleets, helping to “make life multiplanetary”.
He has already sold seats on the rocket, including to Japanese billionaire Yusaku Maezawa, who hopes to fly on the first crewed flight to the Moon while taking eight artists with him as part of his dearMoon programme.
American billionaire Jared Isaacman is also working with SpaceX through his Polaris programme, a series of privately led space missions.
Mr Isaacman will be commander on the Polaris III mission, the first crewed orbital flight on the Starship rocket.