The blast marks a major setback for California-based SpaceX and its founder, internet entrepreneur Elon Musk, who wants to revolutionize the launch industry by making rocket components reusable.
A dense plume of black smoke filled the air following the blast, which destroyed the Israeli communications satellite that Falcon had been due to deliver into orbit on Saturday.
Facebook was due to use the Amos-6 satellite to provide broadband internet coverage for swathes of sub-Saharan Africa as part of the social media giant’s Internet.org initiative.
The US space agency NASA said the incident took place shortly after 9:00 am (1300 GMT).
“SpaceX can confirm that in preparation for today’s static fire, there was an anomaly on the pad resulting in the loss of the vehicle and its payload,” the company said. “Per standard procedure, the pad was clear and there were no injuries.”
Brevard County Emergency Management said there was no threat to the public from the incident.
Amos-6 was the heaviest payload to date for a SpaceX rocket, with an estimated value of between $200 and $300 million, according to John Logsdon, former director of the Space Policy Institute at George Washington University.
The accident — the second of its kind in the firm’s history — is expected to significantly disrupt SpaceX plans for six more launches between now and January 2017.
“It’s clearly a setback, but how great the setback is and how long the delay, it’s impossible to know until there is more information available,” said Logsdon.
A NASA spokeswoman told AFP that emergency services at the nearby Kennedy Space Center were monitoring the situation and conducting air quality tests to ensure there is no threat to the health of staff.
Statement on this morning’s anomaly pic.twitter.com/3Xm2bRMS7T
— SpaceX (@SpaceX) September 1, 2016
Officials at the center advised all staff to remain inside until further notice.
SpaceX had successfully launched a Falcon 9 last month, sending a Japanese communications satellite into orbit and then landing the rocket on a floating drone ship.
The explosion comes just over a year after a Falcon 9 rocket failed just after liftoff, on June 28, 2015, destroying a Dragon cargo capsule bound for the International Space Station (ISS).
The firm has also lost several rockets as it attempted to land them upright on an ocean platform at the end of a flight.
A month old video of Falcon 9 test firing