CAPE CANAVERAL, Fla. -- A catastrophic explosion blew apart the space shuttle Challenger 74 seconds after liftoff yesterday, sending schoolteacher Christa McAuliffe and six NASA astronauts to a fiery death in the sky eight miles out from Kennedy Space Center.

"We mourn seven heroes," said President Reagan.

The accident defied quick explanation, though a slow-motion replay seemed to show an initial explosion in one of two peel-away rocket boosters igniting the shuttle's huge external fuel tank.

The tank burst into a fireball that destroyed the $1.2 billion Challenger high above the Atlantic while crew families and NASA officials watched in despair from the Cape.

Cause Unknown

Other observers noted that the boosters continued to fly crazily through the sky after the explosion, apparently under full power, indicating the that the fatal explosion might have originated in the giant tank itself.

"We will not speculate as to the specific cause of the explosion based on that footage," said Jesse Moore, NASA's top shuttle administrator. National Aeronautics and Space Administration officials are organizing an investigating board and Moore said it will take a "careful review" of all data "before we can reach any conclusions."

It was the second disaster to strike NASA's pioneering space program in 56 manned space missions. In January 1967, astronauts Virgil "Gus" Grissom, Edward White and Roger Chaffee burned to death while preparing for an Apollo flight when a fire destroyed their capsule during a training drill.

Yesterday's launch, scheduled for 9:38 a.m. EST, had been delayed two hours while officials analyzed the possibility that foot-long launch-pad icicles that formed in the frosty Florida morning might cause problems. But after liftoff, at 11:38 a.m., the NASA commentator, Steve Nesbitt, reported systems were normal.

"There were no signs of abnormalities on the screens" as flight controllers monitored Challenger's liftoff and ascent, a source said. The source,at the Johnson Space Center in Houston, said theblast occurred "unexpectedly and with absolutelyno warning."

The explosion occurred about the timeChallenger was to enter a period of maximumaerodynamic pressure when wind and otheratmospheric conditions would place the maximumforce on the outside of the vehicle.

Mission Control reported that there had been noindication of any problem with the three shuttleengines, its twin solid boosters or any othersystem and that the shuttle just suddenly blewapart 10 miles high and 8 miles downrange of CapeCanaveral. Ninety minutes after the accident,controllers were still at their consoles, solemnlyexamining flight data.

Flags at Cape Canaveral were lowered tohalf-staff. The countdown clock that marks theprogress of the mission continued for hours.

Reagan, in an Oval Office address after hepostponed his State of the Union message becauseof the tragedy, reaffirmed his commitment to theshuttle program and said, "The future doesn'tbelong to the fainthearted, it belongs to thebrave."

"We will continue our quest in space," he said."There will be more shuttle flights and moreshuttle crews and, yes, more volunteers, morecivilians, more teachers in space."