The explosion occurred during testing of the rocket engine systems for SpaceShipTwo, which will take passengers into low earth orbit with Virgin Galactic.
Early reports suggest that nitrous oxide was being pushed through piping without the rocket firing, and that the gas escaped and ignited.
"We were doing a test we believe was safe," Burt Rutan, head of Scaled Composites, told CBS. "We do not know why it exploded. We just do not know."
Will Whitehorn, president of Virgin Galactic, expressed his sympathy to the families of the deceased and declined to comment further until Scaled Composites has completed its investigation.
Many astronauts have been killed in accidents, and many more ground crew, in the US. The entire crew of Apollo 1 died in their capsule after an oxygen fire, and the crews of the Challenger and Columbia space shuttles died inflight.
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