Witnesses said the planes were flying in formation during the show at the Marine Corps Air Station at about 4 p.m., and one dropped below the trees and crashed, sending up clouds of smoke.
Raymond Voegeli, a plumber, was backing out of a driveway when the plane ripped through a grove of pine trees, dousing his truck in flames and debris. He said wreckage hit "plenty of houses and mobile homes."
Witnesses said metal and plastic wreckage - some of it on fire - hit homes in the neighborhood, about 35 miles northwest of Hilton Head Island. William Winn, the county's emergency management director, said several homes were damaged. Eight people on the ground were hurt.
The crash took place in the final minutes of the air show, said Lt. Cmdr. Anthony Walley, a Blue Angel pilot. He said the name of the pilot would not be released until relatives were notified of the death.
"Our squadron and the entire U.S. Navy are grieving the loss of a great American, a great Naval officer and a great friend," Lt. Cmdr. Walley said.
A Navy statement said the pilot had been on the team for two years - and it was his first as a demonstration pilot. The accident was under investigation, the statement said.
John Sauls, who lives near the crash site, said the planes were banking back and forth before one disappeared and a plume of smoke shot up.
"It's one of those surreal moments when you go, 'No, I didn't just see what I saw,'" he said.
The Blue Angels is the U. S. Navy's Flight Demonstration Squadron.
Including Saturday's crash, 24 Blue Angels Navy flight squadron pilots have been killed during air shows or in training.
Since its inception in 1946, the Blue Angels have performed for more than 427 million fans.