Firefighters, paramedics and police went to the scene but were unable to save the male pilot.
West Mercia Police said: “At 6.20 am this morning police received a call a hot air balloon had deflated and fallen to the ground near the A449 at Ombersley.
“The balloon fell in a field off Holt Fleet Road, near Ombersley Court. Emergency services attended and unfortunately, a man was pronounced dead by paramedics.”
Onlookers described hearing “screaming” coming from the balloon as it fell.
“My wife heard terrible screaming”.
One said: “There were lots of balloons in the sky because it was clear and sunny despite being so early.
“Suddenly there was a flash and what looked like a fireball coming from a blue balloon and it just dropped like a stone. My wife heard terrible screaming and then silence.
“We called the emergency services but had difficulty getting through on the 999 number because it was down. We finally got through but it was just too high for anyone to survive. It was a terrible thing to see.”
A man who was driving along the A449 from Kidderminster to Worcester at 6.15am said: “I told my partner to take a picture because the balloons looked lovely. Seconds later one of them burst into flames.
“Once it caught fire it went up like tissue paper, it was burnt in about 10 seconds. We couldn’t believe it.
“We thought from that height there would definitely be a fatality. It fell like a rocket and shook us up to watch.”
An investigation will now be carried out by the Air Accidents Investigation Branch.
The last fatal crash is believed to have involved Lee Pibworth and Allan Burnett, both from Bristol, who died when their balloon came down in Midsomer Norton, Somerset, on January 1 2011.
Pibworth, 42, died on impact and a subsequent fire killed Mr Burnett, 55.
Pibworth, a pilot, had been trying to reach an altitude of more than 19,700ft, one of the criteria needed for a British Balloon and Airship Club gold medal.
