Virgin Galactic is SpaceShipTwo, VSS Unity, flew higher than it ever has before on Thursday, surpassing what the US Air Force considers the boundary of space, and marking the first manned flight to space from US soil since 2011.
The brief, suborbital flight -- with two pilots on board -- was a key milestone for the company headed by British tycoon Richard Branson, who is striving to send tourists to space at a cost of $250,000 per seat.
No spacecraft with people on board has taken off from US soil since the American space shuttle program ended, as scheduled, seven years ago.
Since then, the worlds space agencies have relied on Russian Soyuz rockets to ferry astronauts to the International Space Station.
In the meantime, a burgeoning commercial space industry is rushing to close the gap, as companies hurry to complete spacecraft that can carry astronauts and tourists into microgravity.
"Today, for the first time in history, a crewed spaceship, built to carry private passengers, reached space," Branson said in a statement afterward.
"This is a momentous day and I could not be more proud of our teams who together have opened a new chapter of space exploration."
Virgin Galactics spaceship did not launch on a rocket but took off attached to an airplane from Mojave, California.
After reaching a certain altitude, higher than 43,000 feet (13,100 meters), it fired its rocket motors for 60 seconds and made it to a peak height, or apogee, of 51.4 miles (82.7 kilometers).
"We made it to space," the company said on Twitter.
The commonly accepted international definition of space is 62 miles high (100 kilometers), but the US Air Force considers the space boundary to be a bit lower, at 50 miles.
Virgin Galactic has said it would use the US Air Forces definition of space as its standard.
"What we witnessed today is more compelling evidence that commercial space is set to become one of the 21st centurys defining industries," said George Whitesides, CEO of Virgin Galactic and The Spaceship Company.
"Reusable vehicles built and operated by private companies are about to transform our business and personal lives in ways which are as yet hard to imagine."
The US space agency paid Virgin Galactic to fly four space science and technology experiments on the VSS Unity, "making this Virgin Galactics first revenue generating flight," the company added.
"Congrats to @VirginGalactic on SpaceShipTwo successfully flying to suborbital space with our four @NASA_Technology payloads onboard," NASA said on Twitter.
"With a good rocket motor burn, the mission went beyond the 50-mile altitude target."
In July, after burning the rocket motor for 42 seconds, the VSS Unity reached a height of 32 miles.
Commercial airplanes typically fly at an altitude of about six miles, while the orbiting International Space Station is some 250 miles high.
Another US rocket company, Blue Origin, founded by Amazon CEO Jeff Bezos, is also working to send tourists to space, but using a small rocket to get there.
SpaceX and Northrop Grumman operate cargo ships that launch from the United States, toting supplies and food to the space station, but not people.
The first crew tests of SpaceX and Boeings astronaut capsules are expected next year.
Virgins first flight date had been pushed back multiple times, following a test flight accident that killed a co-pilot in 2014.
Branson told CNN in November he hoped to send people to space "before Christmas."
More than 600 clients have already paid $250,000 for a ticket.
The Federal Aviation Administrations acting head Dan Elwell commended Virgin Galactic on its successful flight.
"Commercial space has great potential for American economic and innovative leadership," Elwell said.
"We are pleased that Virgin Galactic is among the many pioneers of space flight helping write a new chapter in aerospace history."