Chief Cabinet Secretary Yukio Edano said that a hydrogen explosion could occur at Unit 3 of the Fukushima Dai-ichi nuclear complex in the country's earthquake-ravaged northeast.
"It is inside the reactor," he said. "We can't see. However, we are assuming that a meltdown has occurred and with reactor No. 3 we are also assuming the possibility of a meltdown as we carry out measures."
That would follow a blast the day before at the same power plant as operators attempted to prevent a nuclear meltdown of another unit by injecting sea water into it.
Edano also said Sunday that a partial meltdown is likely under way at second reactor affected by Friday's massive earthquake.
He said radiation at the nuclear power plant in Fukushima, 170 miles north of Tokyo, briefly rose above legal limit. It had since declined significantly.
A power outage in the aftermath of the magnitude-8.9 earthquake and ensuing tsunami caused three reactors at the plant to lose their cooling functions.
Cooling systems failed at another nuclear reactor on Sunday, hours after an explosion at a nearby unit made leaking radiation, or even outright meltdown, the main threat to the country after a devastating earthquake and tsunami.
It was the sixth reactor overall at the Fukushima No. 1 and No. 2 plants to undergo cooling failure since the quake struck.
Japan's Kyodo News reported that at least 15 people at a nearby hospital were found to have been exposed to radioactivity.
The Japanese government said radiation emanating from the plant appeared to have decreased after Saturday's blast, but the danger was grave enough that officials pumped seawater into the reactor to avoid disaster and evacuated 170,000 people from the area.
An emergency at another reactor unit was reported by Japan's nuclear safety agency. It was the third in the complex to have its cooling systems malfunction.
Japanese news agency NHK alerted people that radioactive material was in the air and to close all openings with wet towels.
Authorities evacuated people from a 12-mile radius around the unit that exploded, Fukushima Dai-ichi, situated 170 miles northeast of Tokyo.
Government spokesman Yukio Edano said the explosion destroyed the exterior walls of the building where the reactor is placed, but not the actual metal housing enveloping the reactor. It's enveloped by stainless steel 6 inches thick.
The explosion was caused by hydrogen interacting with oxygen outside the reactor. The hydrogen was formed when the superheated - and increasingly brittle - metal container of the fuel rods came in contact with water being poured over it to prevent a meltdown.
Edano said the radiation around the Fukushima Dai-ichi plant had not risen after the blast, but had in fact decreased. He did not say why that was so.
"They are working furiously to find a solution to cool the core, and this afternoon in Europe we heard that they have begun to inject sea water into the core," said Mark Hibbs, a senior associate at the Nuclear Policy Program for the Carnegie Endowment for International Peace. "That is an indication of how serious the problem is and how the Japanese had to resort to unusual and improvised solutions to cool the reactor core."
Officials have not given specific radiation readings for the area, though they said they were elevated before the blast: At one point, the plant was releasing each hour the amount of radiation a person normally absorbs from the environment each year.
Virtually any increase in ambient radiation can raise long-term cancer rates, and authorities were planning to distribute iodine, which helps protect against thyroid cancer.
The pressure in the reactor was also decreasing after the blast, according to Edano.
Footage on Japanese TV showed that the walls of one building had crumbled, leaving only a skeletal metal frame block standing. Puffs of smoke were spewing out of the plant.
Although the government spokesman played down fears of radiation leak, the Japanese nuclear agency spokesman Shinji Kinjo acknowledged there were still fears of a meltdown.
A "meltdown" is not a technical term. Rather, it is an informal way of referring to a very serious collapse of a power plant's systems and its ability to manage temperatures.
Japanese news agency NHK reported on that cesium is being detected, which makes them believe that the rods are melting.
The government is asking everyone around the plant to continue to "calmly" evacuate.
Ryohei Shiomi, an official with Japan's nuclear safety commission, said Saturday that officials were checking whether a meltdown had taken place at the Fukushima Dai-ichi power plant.
Shiomi said that even if there was a meltdown, it wouldn't affect humans within a six-mile radius.
Most of the 51,000 residents living within the danger area had been evacuated, he said.
Dr. Tatsujiro Suzuki, vice-chairman of the Japan Atomic Energy Commission, told ABC News: "NSIA just confirmed that the fuel may be partially melting. The question is whether the situation is getting worse or not. It is reported that the level of water is declining (bad news) but pressure is also decreasing (good news). So, efforts to contain the event (need water) may be working. It is also stated that the amount of radioactivity is still small so that the general public does not need to be concerned at present."
A single reactor in northeastern Japan had been the focus of much of the concern in the initial hours after the quake, but the government declared new states of emergency at three other plants in the area Saturday morning.
Japanese nuclear officials say radiation levels inside the Fukushima No. 1 plant have surged to 1,000 times their normal levels after the cooling system failed.
The Japanese earthquake triggered a power outage, and when a backup generator also failed, the cooling system was unable to supply water to cool the reactor. The reactor core remained hot even after a shutdown.
If the outage in the cooling system persists, in the worst case, it could cause a reactor meltdown, a nuclear safety agency official said on condition of anonymity, citing sensitivity of the issue.
The nuclear safety agency said early Saturday that some radiation has also seeped outside the Fukushima No. 1 plant, prompting calls for further evacuations of the area.
The United States has sent assistance to a Japanese nuclear plant affected by the earthquake.
"One of their plants came under a lot of stress with the earthquake," Secretary of State Hillary Clinton said.
Clinton had earlier said the U.S. was sending coolant, but the World Nuclear Association told ABC News that the coolant at the plant is just water, and the assistance that was sent was diesel generators to get the water pumps running.
Japanese authorities had planned to release radioactive vapor to ease pressure at the nuclear reactor, but the continued loss of electricity has also delayed this action.
Joe Cirincione, a nuclear policy expert, told ABC News that the fact that the U.S. is rushing assistance to the reactor is cause for concern.
"We should be worried," he said.
The Associated Press contributed to this story.