The redesigned mega rocket made its debut two days after SpaceX chief Elon Musk announced he's taking the company public.
It blasted off from the southern tip of Texas, carrying 20 mock Starlink satellites that were released midway through the hour-long flight that stretched halfway around the world.
The spacecraft reached its final destination, the Indian Ocean, despite some engine trouble, before erupting in flames upon impact.
Musk called it "an epic" launch and landing. "You scored a goal for humanity," he told his team via his social media platform X.
It's the 12th test flight of the rocket that Musk is building to get people to Mars one day. But first comes the moon and NASA's Artemis program.
The last of the old space-skimming Starships lifted off in October. SpaceX's third-generation Starship - a souped-up version dubbed V3 - soared from a brand-new launch pad at Starbase, near the Mexican border, on Friday afternoon, local time.
Last-minute pad issues thwarted Thursday evening's launch attempt.
SpaceX was hoping to avoid the fireworks it experienced during back-to-back launches in 2025 when midair explosions rained wreckage down on the Atlantic. Earlier flights also ended in flames.
There was no fireball this time until the very end. The spacecraft plummeted into the Indian Ocean as intended under control, then tipped on its side and ignited. That last part was not unexpected, according to SpaceX.
While the liftoff itself went well, not all of the engines fired as the booster attempted a controlled return.
The spacecraft also had to make do with fewer engines, but kept heading eastward 194 kilometres up.
A pair of modified, camera-equipped Starlinks ejected from Starship provided brief views of the spacecraft - a remarkable first - as it aimed for the Indian Ocean.
At 124 metres, the latest model eclipses the older Starship lines by more than a metre and packs more engine thrust.
The revamped booster sports fewer but bigger and stronger grid fins for steering it back to earth following liftoff, and a larger and more robust fuel transfer line to feed the 33 main engines.
The retro-looking, stainless steel spacecraft also has more of everything - more cameras and more navigation and computer power - as well as docking cones for future rendezvous and moon missions.
NASA is paying SpaceX billions of dollars - and also Jeff Bezos' Blue Origin - to provide the lunar landers that will be used to land Artemis astronauts on the moon.
The two companies are scrambling to be first.
While Starship has reached the fringes of space on multiple flights lasting an hour at most, Bezos' Blue Moon has yet to lift off, although a prototype is being readied for a moonshot later in 2026.
NASA is following April's successful lunar flyaround by four astronauts with a docking trial run in orbit around earth planned for 2027.
A moon landing by two astronauts - Artemis IV - could follow as soon as 2028 using either Starship or Blue Moon, whichever lander is safer and ready first.
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