The troubles at the the Fukushima Dai-ichi nuclear plant began when Friday's massive earthquake and tsunami knocked out power, debilitating cooling systems needed to keep nuclear fuel from melting down.
An agency spokesman speaking on national television said the explosion was heard at Unit 2 at 6:10 a.m. Tuesday (2110 GMT). It is the plant's third explosion in four days.
Officials also announced that a fourth reactor had caught fire and was leaking radiation.
Japan's nuclear safety agency says fire at the No. 4 reactor was extinguished shortly after 8 p.m. PT.
Water levels had dropped precipitously Monday inside the stricken Unit 2 reactor, twice leaving the uranium fuel rods completely exposed and raising the threat of a meltdown, hours after a hydrogen explosion tore through the building housing a different reactor.
Water levels were restored after the first decrease but the rods remained exposed late Monday night after the second episode, increasing the risk of the spread of radiation and the potential for an eventual meltdown.
Tokyo Electric Power Co. said the exposure happened at Unit 2 because a steam vent wouldn't open, causing a sudden drop of water.
That reactor and two others at the plant were dangerously overheating. Japanese officials said the nuclear fuel rods appeared to be melting inside all three of the most troubled nuclear reactors at the Fukushima Dai-ichi plant.
An official said crews can't directly check it, but that it likely is happening. Some experts would consider that a partial meltdown of the reactor. But others reserve that term for times when nuclear fuel melts through a reactor's innermost chamber but not through the outer containment shell.
Earlier, a hydrogen explosion took place at Unit 3 at the plant, injuring 11 workers. The explosion sent a massive column of smoke into the air and people felt the blast 25 miles away. The U.S. said it had to shift its offshore forces away from the plant hours later when it detected low-level radioactive contamination.
The aircraft carrier USS Ronald Reagan was about 100 miles offshore when it detected the radiation, which U.S. officials said was about the same as one month's normal exposure to natural background radiation.
Friday's magnitude-8.9 earthquake and tsunami triggered a system failure and caused radiation to leak. The plant's operator said radiation levels at the reactor were still within legal limits. An official said the inner reactor container remains intact after the explosion.
Hundreds of people were ordered to stay indoors due to the explosion at Unit 3. The reactor had been under emergency watch for a possible explosion as pressure built up there following a hydrogen blast Saturday in the facility's Unit 1, which injured four workers and caused mass evacuations.
Operators knew an explosion was a possibility as they struggled to reduce pressure inside the reactor containment vessel, but apparently felt they had no choice if they wanted to avoid a complete meltdown. In the end, the hydrogen in the released steam mixed with oxygen in the atmosphere and set off the blast.
Shortly after the explosion, Tokyo Electric Power Co., which operates the plant, warned it had lost the ability to cool Unit 2.
Officials have declared states of emergency at six Fukushima reactors, where Friday's twin disasters knocked out the main cooling systems and backup generators. Three are at Dai-ichi and three at the nearby Fukushima Daini complex.
More than 180,000 people have evacuated the area in recent days, and up to 160 may have been exposed to radiation.
Even though Japan's government insists that so far, radiation levels are safe, some nuclear experts disagree and warn of a disaster worse than Chernobyl. The Associated Press contributed to this story.
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