The island holds a fireworks celebration each Independence Day.
Anchorage Marina dock master Robert Raborn says the explosion was heard across Ocracoke village. He watched numerous medical helicopters fly in.
Raborn says from his vantage point 200 yards away, it looked like 40 minutes worth of fireworks went off in four seconds.
Ocracoke Island is the southernmost inhabited island on the Outer Banks, about two hours from the mainland, and is only accessible by ferry.