On the afternoon of May 11, 1996, Valet Flight 592 pushed back from gate G2 in Miami after a delay of 1 hour and 4 minutes due to mechanical problems.There were 110 people on board: 105 passengers, mainly from Florida and Georgia, and a crew of two pilots and three flight attendants. At 2:04 PM EDT, the DC-9 took off from runway 9L (now runway 8R) and began a normal climb.

At 2:10 p.m the passengers started to smell smoke. At the same time, the pilots heard a loud bang in their headsets and noticed the plane was losing electrical power. The sag in electrical power and the bang were eventually determined to be the result of a tire in the cargo hold exploding. Seconds later, a flight attendant entered the cockpit and informed the flight crew of a fire in the passenger cabin. Passengers' shouts of "fire, fire, fire" were recorded on the cockpit voice recorder (CVR) when the cockpit door was opened. Though ValuJet's flight attendant training manual stated that the cockpit door should not be opened when smoke or other harmful gases might be present in the cabin, the intercom was not functional and informing the pilots of what was happening was difficult. The flight data recorder (FDR) indicated a progressive failure of the DC-9's electrical and flight control systems due to the spreading fire.

Kubeck and Hazen immediately asked air traffic control for a return to Miami due to the increasing smoke in the cockpit and cabin, and were given instructions for a return to the airport. One minute later, Hazen requested the nearest available airport. Kubeck began to turn the plane left in preparation for the return to Miami.

Flight 592 disappeared from radar at 2:13:42 PM, the exact time that it crashed. Eyewitnesses nearby watched as the plane banked sharply, rolled onto its side and nosedived into the Francis S. Taylor Wildlife Management Area in the Everglades, a few miles west of Miami, at a speed in excess of 507 miles per hour (441 kn; 816 km/h). Kubeck lost control of the plane less than 10 seconds before impact. Examination of debris suggested that the fire had burned through the floorboards in the cabin, resulting in structural failure and damage to cables underneath the instrument panels. The NTSB report on the accident stated, "the Safety Board cannot rule out the possibility that the flightcrew was incapacitated by smoke or heat in the cockpit during the last 7 seconds of the flight."

At the end of a fifteen-month investigation, the National Transportation Safety Board (NTSB) determined that the fire that downed Flight 592 developed in a cargo compartment below the passenger cabin. The cargo compartment was a Class D design, in which fire suppression is accomplished by sealing off the hold from outside air. Any fire in such an airtight compartment would quickly exhaust all available oxidizers and then burn itself out. As the fire suppression can be accomplished without any intervention by the crew, such holds are not equipped with smoke detectors. However, the NTSB quickly determined that just before takeoff, 144 expired chemical oxygen generators, each slightly larger than the size of a tennis ball can, had been placed in the cargo compartment in five boxes marked COMAT (company material) by ValuJet's maintenance contractor, SabreTech, in violation of Federal Aviation Administration (FAA) regulations forbidding the transport of hazardous materials in passenger aircraft cargo holds.^[a] Failure to cover the generators' firing pins with the prescribed plastic caps made an accidental activation much more likely. The investigation revealed that rather than covering them, the cords attached to the firing pins were simply cut or duct-taped around the cans, and Scotch tape was also used to stick the ends down. SabreTech employees indicated on the cargo manifest that the "oxy canisters", which were loosely packed in the boxes that were each sealed with tape and bubble wrap, were "empty". ValuJet workers then loaded the boxes in the cargo hold in the mistaken belief that the devices that they contained were just empty canisters, thus being certified as supposedly "safe" to transport on a passenger aircraft, when in fact they were neither simple oxygen canisters, nor empty.

Chemical oxygen generators, when activated, produce oxygen for passengers if the plane suffers a decompression. However, they also produce a great quantity of heat due to the exothermic nature of the chemical reaction involved. Therefore, not only could the heat and generated oxygen start a fire, but the oxygen could also keep the fire burning. The fire was worsened by the presence of two main aircraft tires (one of them mounted on a main wheel) and a nose tire and wheel that were also included in the list of materials shipped as COMAT. Investigators determined that one of the oxygen generators was likely triggered when the plane experienced a slight jolt while taxiing. As the aircraft taxied and took off, the generator began accumulating heat, soon setting fire to its surroundings.

Laboratory testing showed that canisters of the same type could heat nearby materials up to 500 °F (260 °C). The oxygen from the generators fed the resulting fire in the cargo hold without any need for outside air, defeating the cargo hold's airtight design. A pop and jolt heard on the cockpit voice recording and correlated with a brief and dramatic spike in the altimeter reading in the flight data recording were attributed to the sudden cabin pressure change caused by one of the wheels in the cargo hold exploding due to the heat. Investigators also determined that in this process, the fire began to destroy control cables that ran to the back of the aircraft, which explained why the pilots began losing control before the plane crashed; the NTSB concluded that the aircraft was under positive control by the pilots until the time of the sharp right turn and dive immediately prior to impact.

Smoke detectors in the cargo holds can alert the flight crew of a fire long before the problem becomes apparent in the cabin, and a fire suppression system buys valuable time to land the plane safely. In February 1998, the FAA issued revised standards requiring all Class D cargo holds to be converted by early 2001 to Class C or E; these types of holds have additional fire detection and suppression equipment.