The deep-space rocket system went through nearly an hour-long integrated flight test. The spacecraft was expected to splash down in the Indian Ocean at the conclusion of the flight, putting the gargantuan vehicle in a position to move on to more complex test flights and, eventually, carry NASA astronauts to the moon's surface.
But after reentry the team lost two key pieces of communication at the same time: Contact with Starlink, SpaceX's internet service, and with TDRSS - or Tracking and Data Relay Satellite System.
"The team has made the call that the ship has been lost, so no splashdown today," said Dan Huot, SpaceX communications manager, during the live broadcast. "But again, just it's incredible to see how much further we got this time around."
SpaceX also never intended to recover Starship after this flight test. The spaccraft was expected to make a hard landing.
The company routinely frames failures during these early test flights as normal. The goal of these flight tests is to gather crucial data so that engineers can go back and tinker with Starship, improving it for future missions.
The Starship vehicle - which includes the upper Starship spacecraft and a rocket booster known as the Super Heavy - took off from SpaceX's private Starbase facility in Boca Chica, Texas, at 8:25 a.m. CT (9:25 a.m. ET).
SpaceX considers the Starship system crucial to its founding mission: to carry humans to Mars for the first time. And critically, NASA has chosen Starship as the landing vehicle that will ferry its astronauts to the lunar surface on the Artemis III mission slated to take off as soon as September 2026.
"Congrats to SpaceX on a successful test flight! Starship has soared into the heavens. Together, we are making great strides through Artemis to return humanity to the Moon- then look onward to Mars," wrote NASA Administrator Bill Nelson on X, formerly known as Twitter.
The Super Heavy booster - the first stage, or bottommost part, of the launch vehicle roared to life and soared out over the Gulf of Mexico.
The Super Heavy booster burned through most of its fuel and broke away from the Starship spacecraft, the upper stage that rides atop the Super Heavy.
The booster was expected to make an autonomous, controlled landing in the ocean, but the booster "didn't light all the engines that we expected and we did lose the booster," Huot said.
SpaceX said it's working to get video of what occurred before the booster hit the water. But the the booster made it farther into flight than a Super Heavy booster has previously made it. On the past two flights, Super Heavy was destroyed midair before it had a chance to try out landing maneuvers.
The third test flight occurred on SpaceX's 22nd anniversary, according to the live stream.
SpaceX CEO Elon Musk has said a primary goal of these early test flights is to get Starship to orbital speeds - velocities quick enough to allow the spacecraft to enter a stable orbit around Earth.
Typically, such a feat requires speeds topping 17,500 miles per hour (28,000 kilometers per hour).
Starship will not, however, aim to actually enter orbit on this flight. Instead, the spacecraft will make a hard landing in the Indian Ocean - hopefully more than 230 miles (370 kilometers) away from the nearest land mass, according to documents published by the Federal Aviation Administration, which licenses commercial rocket launches.
Starship will have to burn its engine for about six minutes before it enters a coasting phase. The spacecraft will then run through a few key tests and tech demonstrations.
First, Starship will attempt to open its payload door - a hatch that must swing ajar for the capsule to deploy satellites into space on future missions.
Then, SpaceX will also carry out what the company is calling a "propellant transfer demonstration." The goal is to move some of the propellant on board the Starship vehicle from one tank to another, according to a December email from NASA explaining the test.
SpaceX engineers designed that demo to begin hashing out how Starship will be refueled on future missions while it's in orbit.
Topping off the spacecraft's fuel will be critical for Starship's high-profile missions down the road.
When Starship makes a journey to the moon under NASA's Artemis program - it will have to sit in orbit close to Earth as SpaceX launches separate vehicles that will transport only fuel to the spacecraft. To get to the moon, SpaceX may have to make more than a dozen refueling trips.
SpaceX received approval from regulators on Wednesday to carry out this latest test flight.
About 40 minutes into flight, the Starship vehicle will attempt to reignite its massive engines once more before it plunges back toward the ocean.
Musk has said he's more confident this flight will be successful compared with the 2023 attempts. A success would potentially give the company crucial data that could allow Starship to move on to more difficult test flights.
"I don't want to jinx it, but I think the probability of reaching orbit is good - 80%," he said during a recent talk posted to social media . "Certainly the third flight is a much better rocket than flights one or two."
Still, SpaceX officials have repeatedly said the company does not expect 100% accuracy on these early test flights.
"Each of these flight tests continue to be just that: a test. They aren't occurring in a lab or on a test stand, but are putting flight hardware in a flight environment to maximize learning," the company said in a statement posted to its website. "This rapid iterative development approach has been the basis for all of SpaceX's major innovative advancements."
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ABC7 Chicago contributed to this report.