The European light launcher rocket Vega-C was lost shortly after lift-off from French Guiana on Tuesday with two Airbus satellites on board, the company behind the launch said.
The rocket had been trying to bring into orbit two Earth observation satellites built by Airbus, intended to join an existing network that captures high-quality images of any point on the globe several times a day.
"The mission is lost," Stephane Israel, head of commercial launch service provider Arianespace, said from the Kourou Space Center in French Guiana.
Ten minutes after liftoff, at 10.47pm (0147 GMT), the launcher's trajectory deviated from its programmed route and communications were lost, it said.
An "anomaly occurred" in the second stage of the launcher, "ending the Vega-C mission, the company said in a statement.
"Data analysis is under way to determine the reasons for this failure," it added.
Arianespace found there was no debris fallout after liftoff.
Tuesday's event was the first commercial flight of the rocket after its successful inaugural launch on 13 July.
Originally scheduled for 24 November, the flight was postponed for a month due to a faulty launch element.
Tuesday's launch was the fifth and final launch of the year for Europe's spaceport in Kourou.
A press briefing is scheduled for noon on Wednesday in Kourou.