PayPal co-founder and billionaire Elon Musk, who helped develop and finance the rocket, said in a statement on the SpaceX site that "all vehicle systems, including the main engine, thrust vector control, structures, avionics, software, guidance algorithm, etc. were picture perfect."
The Falcon 1 lifted off the ground, but note the flames at bottom of the rocket.
The next step for the private space group is to assist with an investigation by the federal government. All future launches are currently on hold but Musk hopes the next rocket will take off in about six months.