Elon Musk's plans to send humans to orbit Mars have been dealt a heavy blow after an explosion rocked the site during testing.

Video captured part of the Tesla billionaire's SpaceX Starship appearing to explode at a launch facility in Texas.

The spacecraft engineering company is prepping the rocket for its first orbital launch, which Musk had hoped to be ready for this month.

NASA Spaceflight was live-streaming when the explosion happened.

"Wow!" shocked commentators were heard saying multiple times.

Responding to the video on Twitter, Musk said: "Yeah, actually not good. Team is assessing the damage."

He confirmed "booster engine testing" was being done after another user questioned whether the firing was intentional.

There is speculation the incident will hold up the landmark orbital test flight of the Starship. Photo / NASA Spaceflight

SpaceX is testing Super Heavy Booster 7 at Starbase, the company's launch site in Boca Chica, Texas.

Space.com explained the Starship system includes the Super Heavy and a 50m tall upper-stage spacecraft called Starship.

According to the SpaceX website, Starship is "a fully reusable transportation system designed to carry both crew and cargo to Earth orbit, the Moon, Mars and beyond".

There is speculation that the explosion will hold up the landmark orbital test flight.