Later, the company created the so-called Dragon 2 in two versions: Crew Dragon, which will fly with crew, and Cargo Dragon, with loads.
It has had to rely instead on Russian Federation and its Soyuz spacecraft.
Now less clear, those options are growing more important. NASA has picked SpaceX's Crew Dragon to fly astronauts to and from the International Space Station, with the first crewed flight expected later this year.
So what happened? Not a lot of detail has been supplied yet.
"The initial tests completed successfully but the final test resulted in an anomaly on the test stand", the company said in a statement.
SpaceX, founded by Elon Musk in 2002, plans to use the Crew Dragon capsule to ferry NASA astronauts to and from the International Space Station.More news: Kings coach Walton not under investigation
More news: Local Democratic members of Congress react to Mueller report
More news: New sketch, video released in Delphi murder investigation
The spacecraft was to be tested near SpaceX's Cape Canaveral Landing Zone facilities, where the company has a small but dedicated space for Dragon tests.
At the same time, only hardware was lost Saturday, not lives. Bridenstine tweeted that NASA and SpaceX were "assessing the anomaly".
There were no reported injuries from the incident, although it is possible that anomaly could affect future SpaceX launch schedules. That capsule was slated to be used for an upcoming in-flight abort test, the second of two meant to prove the spacecraft can escape from a malfunctioning booster, before a crew will be cleared for launch.
Video footage of the explosion or "anomaly" as SpaceX refers to it has surfaced.
As pressure-fed rocket engines specifically created to be the basis of a launch escape system, Crew Dragon and its SuperDraco thrusters are meant to be ready to ignite at a millisecond's notice once they are armed in a flight-ready configuration. The Crew Dragon scheduled to carry the first astronauts into space this summer or fall is not yet believed to be in Florida.
Teams will investigate cause of the failure and any required fixes. Both capsules were supposed to start flying in 2017, but SpaceX and Boeing have been hampered with delays.
Instead of a problem with its high-performance abort thrusters, it can be tentatively concluded that Crew Dragon's explosion originated in its fuel tanks or propellant plumbing.