The 986-pound satellite was supposed to be placed into a polar orbit some 400 miles high to track carbon dioxide emissions. The project was nine years in the making, and the mission was supposed to last two years.
Scientists currently depend on 282 land-based stations - and scattered instrumented aircraft flights - to monitor carbon dioxide at low altitudes.
"Certainly for the science community it's a huge disappointment," said John Brunschwyler, Taurus project manager for Orbital Sciences Corp., which built the rocket and satellite. "It's taken so long to get here."
The rocket landed in the ocean near Antarctica. A group of environment ministers from more than a dozen countries met on the southern continent this week to get the latest science on global warming.
NASA said it will convene a team of experts to investigate the loss of the satellite.
The observatory was NASA's first satellite dedicated to monitoring carbon dioxide on a global scale. Measurements collected from the $280 million mission were expected to improve climate models and help researchers determine where the greenhouse gas originates and how much is being absorbed by forests and oceans.
Last month, Japan successfully launched the world's first satellite to monitor global warming emissions.
Carbon dioxide is the leading greenhouse gas and its buildup helps trap heat from the sun, causing potentially dangerous warming of the planet. Carbon dioxide emissions rose 3 percent worldwide from 2006 to 2007, according to international science agencies.
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