Footage of the explosion and subsequent fire has been posted online.
A Standard Missile-2 (SM-2) reportedly failed to launch from the German air defense frigate FGS Sachsen, as the rocket booster burned out while the missile was still inside its canister.
The German Navy said that the crew's quick reaction brought the situation under control.
The incident occurred in a Norwegian exercise range off the coast of Norway. Reasons for the incident remain unknown.