A privately developed liquid fuel rocket has entered Earth orbit, becoming the first such rocket to do so and heralding the dawn of the private sector space industry.

At 4:15 p.m. PST on Sunday, Space Exploration Technologies (SpaceX) launched its Falcon 1 rocket from the Reagan Test Site on Omelek Island, which lies about 2,500 miles southwest of Hawaii in the Pacific Ocean and is part of the U.S. Army's Kwajalein Atoll.

The company's three previous launches failed. Its stated aim is to develop a new series of space vehicles to "reduce the cost and increase the reliability of space access by a factor of ten."

"This is a great day for SpaceX and the culmination of an enormous amount of work by a great team," said Elon Musk, CEO and CTO of SpaceX, in a statement. "The data shows we achieved a super precise orbit insertion -- middle of the bull's-eye -- and then went on to coast and restart the second stage, which was icing on the cake."

Musk, a multimillionaire, is the co-founder of online payment company PayPal and chairman of the board of Tesla Motors, a high-performance electric car startup.

Falcon 1 is carrying a simulated payload, a hexagonal aluminum alloy chamber that weighs 364 pounds and stands about 5 feet tall, designed specifically for Sunday's test mission.

The company's previous test flight, which lost contact with mission controllers after launch on Aug. 2, carried real satellites for NASA and the Department of Defense, along with a portion of the cremated remains of some 200 people, including Mercury Seven astronaut Gordon Cooper and Star Trek's James Doohan, who played engineer Montgomery Scott.

For power, the rocket relies on Merlin, a gas generator cycle kerosene engine developed by SpaceX from an injector system used in the Apollo Moon program's lunar module landing engine. Merlin provides 125,000 pounds of thrust at sea level.

Sunday also marked the return of China's Shenzhou VII space capsule and its three-man crew to Earth after a successful spacewalk.

(Video provided by SpaceX.)

This article was edited on Sept. 29 to clarify the historical significance of the Falcon 1.