On April 20, 2010, an explosion and fire occurred on the Deepwater Horizon semi-submersible mobile offshore drilling unit, which was owned and operated by Transocean and drilling for BP in the Macondo Prospect oil field about 40 miles (64 km) southeast off the Louisiana coast. The explosion and subsequent fire resulted in the sinking of the Deepwater Horizon and the deaths of 11 workers; 17 others were injured. The same blowout that caused the explosion also caused an oil well fire and a massive offshore oil spill in the Gulf of Mexico, considered the largest accidental marine oil spill of all time, and the largest environmental disaster in United States history.

Deepwater Horizon was a floating semi-submersible drilling unit—a fifth-generation, ultra-deepwater, dynamically positioned, column-stabilized drilling rig owned by Transocean and built in South Korea. The platform was 396 feet (121 m) long and 256 feet (78 m) wide and could operate in waters up to 8,000 feet (2,400 m) deep, to a maximum drill depth of 30,000 feet (9,100 m). Press releases from Transocean state the platform had historically been used for deeper wells, including the deepest underwater gas and oil well. The $560 million platform was built by Hyundai Heavy Industries in South Korea and completed in 2001. It was owned by Transocean, operated under the Marshallese flag of convenience, and was under lease to BP until September 2013. At the time of the explosion, the Deepwater Horizon was on Mississippi Canyon Block 252, referred to as the Macondo Prospect, in the United States sector of the Gulf of Mexico, about 41 miles (66 km) off the Louisiana coast. In March 2008, the mineral rights to drill for oil on the Macondo Prospect were purchased by BP at the Minerals Management Service's lease sale. The platform commenced drilling in February 2010 at a water depth of approximately 5,000 feet (1,500 m). At the time of the explosion the rig was drilling an exploratory well. The planned well was to be drilled to 18,360 feet (5,600 m) below sea level, and was to be plugged and suspended for subsequent completion as a subsea producer. Production casing was being run and cemented at the time of the accident. Once the cementing was complete, it was due to be tested for integrity and a cement plug set to temporarily abandon the well.

The rig owner, Transocean, had a "strong overall" safety record with no major incidents for 7 years. However a Wall Street Journal analysis "painted a more equivocal picture" with Transocean rigs being disproportionately responsible for safety related incidents in the Gulf and industry surveys reporting concerns over falling quality and performance. Between 2005 and 2007, Transocean was the owner of 30% of oil rigs active in the Gulf, and 33% of the incidents that triggered a Minerals Management Service (MMS) investigation took place on Transocean rigs. However, in the 3 years from 2008 to February 15, 2010, Transocean was the owner of 42% of rigs active in the Gulf but was responsible for 73% of incidents. Industry surveys saw this as an effect of its November 2007 merger with rival GlobalSantaFe. Transocean was described as having had previous problems with both cement seals (in 2005) and blowout preventers (in 2006), both the suspected cause of the Deepwater Horizon disaster; however, the company stated that cementing was a task completed by third party laborers, and that it had "a strong maintenance program to keep blowout preventers working". According to the Wall Street Journal online:

In 2008 and 2009, the surveys ranked Transocean last among deep-water drillers for "job quality" and second to last in 'overall satisfaction'. For three years before the merger, Transocean was the leader or near the top in both measures. Transocean ranked first in 2008 and 2009 in a category that gauges its in-house safety and environmental policies. There were few indications of any trouble with the Deepwater Horizon before the explosion. The rig won an award from the MMS for its 2008 safety record, and on the day of the disaster, BP and Transocean managers were on board to celebrate seven years without a lost-time accident. A BP spokesman said rigs hired by BP have had better safety records than the industry average for six years running, according to MMS statistics that measure the number of citations per inspection. BP has been a finalist for a national safety award from the MMS for the past two years. [BP spokesperson Toby Odone] wouldn't comment on BP's relationship with Transocean after the Gulf disaster but said BP continues to use Transocean rigs.

In February 2009, BP filed a 52-page exploration and environmental impact plan for the Macondo well with the Minerals Management Service (MMS), an arm of the United States Department of the Interior that oversees offshore drilling. The plan stated that it was "unlikely that an accidental surface or subsurface oil spill would occur from the proposed activities". In the event an accident did take place, the plan stated that due to the well being 48 miles (77 km) from shore and the response capabilities that would be implemented, no significant adverse impacts would be expected. The Department of the Interior exempted BP's Gulf of Mexico drilling operation from a detailed environmental impact study after concluding that a massive oil spill was unlikely. In addition, following a loosening of regulations in 2008, BP was not required to file a detailed blowout plan.

The BP wellhead had been fitted with a blowout preventer (BOP), but it was not fitted with remote-control or acoustically activated triggers for use in case of an emergency requiring a platform to be evacuated. It did have a dead man's switch designed to automatically cut the pipe and seal the well if communication from the platform is lost, but it was unknown whether the switch was activated. Documents discussed during congressional hearings June 17, 2010, indicated that Transocean previously made modifications to the BOP for the Macondo site which increased the risk of BOP failure, in spite of warnings from their contractor to that effect. Regulators in both Norway and Brazil generally require acoustically activated triggers on all offshore platforms, but when the Minerals Management Service considered requiring the remote device, a report commissioned by the agency as well as drilling companies questioned its cost and effectiveness. In 2003, the agency determined that the device would not be required because drilling rigs had other back-up systems to cut off a well.

The US Coast Guard had issued pollution citations for Deepwater Horizon 18 times between 2000 and 2010 and had investigated 16 fires and other incidents. These incidents were considered typical for a Gulf platform and were not connected to the April 2010 explosion and spill. The Deepwater Horizon had other serious incidents, including one in 2008 in which 77 people were evacuated from the platform when it tilted and began to sink after a section of pipe was incorrectly removed from the platform's ballast system.

The American Bureau of Shipping last inspected the rig's failed blowout preventer in 2005.