One Marine was also killed Sunday, when the aircraft disappeared behind a cloud of red dust as it began to land around 11:40 a.m. at Oahu's Bellows Air Force Station.
The Osprey was carrying 22 U.S. service members when it crashed, officials said. Twenty-one people on board the Osprey were injured; one remains in critical condition and three others in stable condition. According to the Marines, 21 Marines were and one Navy corpsman were on board.
"There was a fire -- unclear at this point whether or not the fire is what caused the hard landing [or] the fire broke out after," Col. Steve Warren, a Pentagon spokesman, said today. "One way or another there was a fire involved."
Tim O'Neil told ABC affiliate KITV4 in Honolulu that at first he saw three Osprey aircraft in formation.
"One of them proceeded to fly really close to the ground and sent a lot of dust into the air," he said. "After some of the dust had dissipated, there was ... fire."
The aircraft broke apart from the force of the touchdown, creating a debris field as wide as 60 feet.
"The dust storm continued to where it almost wasn't visible anymore," said Desiree Faumui, who witnessed the crash. "When it cleared, two came up, continued to circle, but there were just two that came up."
In a statement, the 15th Marine Expeditionary Unit described the aircraft as a tilt-rotor MV-22 Osprey that takes off and lands like a helicopter but flies like an airplane. The Marine unit, from California's Camp Pendleton, was reportedly at Bellows for training purposes.
The Osprey has had a troubled history. Before Sunday's fatal incident, Osprey crashes had killed 30 people during early test flights in 1992 and 2000.
In April 2000, in the deadliest crash, 19 Marines were killed when the Osprey they were traveling in crashed during a training exercise in Arizona. The Marine Corps temporarily grounded all 11 MV-22 Osprey aircraft after the fatal accident. Before 2007, Osprey aircraft were involved in tests or training flights. The aircraft went on active duty in 2007.
Marine spokesman Capt. Ty Balzer today called the Osprey MV-22 aircraft "reliable" and "safe."
"The incredible effectiveness and survivability of this versatile aircraft have been demonstrated again and again," Balzer said in an emailed statement to ABC News. "The MV-22 has proven itself remarkably in combat for the past seven years of combat deployments."
Investigators said today that they were not sure why the aircraft went down in Hawaii but that an investigation was ongoing and that there would be no change in Osprey flights.
ABC News' Clayton Sandell contributed to this report.