There were no injuries. The pad had been cleared of workers before what was supposed to be a routine pre-launch rocket engine test.
SpaceX chief Elon Musk said the accident occurred while the rocket was being fueled and originated around the upper-stage oxygen tank.
"Cause still unknown," Musk said via Twitter. "More soon."
The explosion — heard and felt for miles around — dealt a severe blow to SpaceX, still scrambling to catch up with satellite deliveries following a launch accident last year. It's also a setback for NASA, which has been relying on the private space company to keep the International Space Station stocked with supplies and, ultimately, astronauts.
SpaceX was preparing for the test firing of its unmanned Falcon rocket when the blast happened shortly after 9 a.m. at Cape Canaveral Air Force Station. The test was in advance of Saturday's planned launch of an Israeli-made communications satellite to provide home internet for parts of sub-Saharan Africa, the Middle East and Europe.
A video of the explosion shows a fireball enveloping the top of the rocket. Moments later, the nose cone containing the satellite plunged to the ground, followed by more explosions.
Buildings four miles away shook from the blast, and a series of explosions continued for several minutes. Dark smoke filled the overcast sky. A half-hour later, a black cloud hung low across the eastern horizon.
Video cameras showed smoke coming from the restricted site well into late afternoon. Most of the rocket was still standing, although the top third or so was clearly bent over.
The explosion occurred at Launch Complex 40 at the Air Force station, right next door to NASA's Kennedy Space Center, where emergency staff went on standby and monitored the air for any toxic fumes. The initial blast sent NASA employees rushing outside to see what happened. The Air Force stressed there was no threat to public safety in the surrounding communities.