The two others were missing in the accident, which occurred last night as the balloon was making its descent in a pre-designated field, said Corrine Geller, spokeswoman for the Virginia state police.
"We spent all night searching for the wreckage of the basket, the balloon," she told a news conference. "It was just before midnight that we were able to locate one of the occupants."
"At this time, we are still searching for the two others that were in the balloon as well as the wreckage sites of the basket and the balloon itself," she said.
Witnesses watched as the balloon caught fire in the evening sky after hitting a power line as it was coming down to earth, she said.
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"The witnesses heard an explosion and after that, the basket and the balloon actually separated," Geller said.
The balloon was one of three that launched at 8:00 pm yesterday (local time) from Meadow Event Park in Caroline County, Virginia. The other two landed before it without incident.