An unmanned Antares rocket exploded seconds after lift off from a commercial launch pad in Virginia on Tuesday, a NASA TV broadcast showed.
It is the first accident since Nasa turned to private operators to deliver cargo to the International Space Station, but officials said no one was hurt.
The 14-storey rocket, built and launched by Orbital Sciences blasted off its seaside launch pad at the Wallops Flight Facility at 6.22pm local time carrying a Cygnus cargo ship for the space station. It exploded in a huge fireball moments later.
The cause of the accident was not immediately known, said Nasa mission commentator Dan Huot.
Mr Huot said there were no reports of any personnel in the vicinity of the explosion.
Orbital Sciences said in a statement: "We've confirmed that all personnel have been accounted for. We have no injuries in the operation today."
Nasa launch control said damage appeared to be limited to the launch facility and rocket. The Antares rocket has been launched successfully on four previous missions.
Launch had been delayed one day after a boat sailed into a restricted safety zone beneath the rocket's intended flight path.
Virginia-based Orbital Sciences is one of two companies hired by NASA to fly cargo to the station after the space shuttles were retired. Tuesday's planned flight was to be the third of eight under the company's $1.9 billion contract with Nasa.
Fitted with a new, more powerful engine, the Antares rocket launched on Tuesday carried a Cygnus spacecraft carrying 2293kg of supplies, science experiments and equipment, a 15 percent increase over previous missions.
Cygnus was to loiter in orbit until 2 November then fly itself to the station so astronauts can use a robotic crane to snare the capsule and attach it to a berthing port.
The station, a $100 billion research laboratory owned and operated by 15 nations, flies about 418km above Earth.