In a live broadcast, a SpaceX official said: "a beautiful soft landing," despite the flames coming out from the bottom and crew attempting to douse it.
A few minutes later, the rocket went off the ground and exploded back, billowing huge clouds of smoke as the debris fell on the ground.
Though the mission did not go as planned, Musk joking in a tweet wrote that the rocket "landed in one piece".
"SpaceX team is doing great work! One day, the true measure of success will be that Starship flights are commonplace," the SpaceX founder said in another tweet.
The rocket, named SN10 went into the sky and progressively closed its three engines as it reached a height of 10 km and assumed a horizontal position before getting vertical again and returning to Earth.
According to the SpaceX video, it appeared that the rocket landed properly. But, the explosion followed.
Earlier, SpaceX's Starship SN9 blew up in another crash landing on February 2. Everything appeared fine, but the rocket did not manage to straighten itself on time and exploded as it touched the ground.
After the test flight, Starship prototype SN8 exploded on December 9. The live video showed the rocket landing at speed and followed it up by a controlled descent before blasting as it reached the ground.