There were no injuries after the prototype, known as Morpheus, burst into flames near the runway formerly used by NASA's space shuttles.
The insect-like vehicle, designed and built by engineers at NASA's Johnson Space Center in Houston, had made several flights attached to a crane before the attempted free-flight.
Morpheus' engines, which burn liquid oxygen and methane, appeared to ignite as planned, lifting the 794kg vehicle into the air.
But a few seconds later, Morpheus rolled over on its side and plummeted to the ground.
NASA video showed the vehicle engulfed in flames and then rocked by a spectacular explosion, presumably due to the fuel tanks rupturing.
“"Failures such as these were anticipated prior to the test, and are part of the development process for any complex spaceflight hardware," NASA said in a statement.
An investigation is under way, the statement added.
Project Morpheus began in partnership with privately owned Armadillo Aerospace, which is developing re-usable, suborbital vehicles that take off and land vertically.
NASA, which has spent about $US7 million on the project over the past 2½ years, is interested in developing technologies that could be used to fly cargo to the moon and other future missions beyond Earth orbit.
Project Morpheus was an example of what the former project manager called "“Home Depot engineering" - low-budget projects that use existing resources and partner with non-traditional aerospace companies.
“"The Morpheus lander is kind of our poster child. It's one of our first attempts to do these kinds of projects," former project manager Matt Ondler said in an interview with Reuters last year.
“"Instead of building some elaborate test structure, you go to Home Depot and build something very quickly that gets you 80 percent of the answer and allows you to keep moving forward," he said.
Morpheus arrived at Florida's seaside space center in July for three months of increasingly rigorous test flights, including automated landings in a mock moonscape, complete with craters and boulders.
The lander was designed to deliver about 500kg of cargo to the moon, NASA said on its Project Morpheus website.
Technologies being developed include a propulsion system that uses liquid oxygen and methane - green fuels that could be manufactured on other planetary bodies, NASA said.
The accident happened as NASA scientists were still hailing the Mars rover Curiosity's descent and landing on the Red Planet earlier this week as a "“miracle of engineering."
