The private boat exploded at about 8 a.m. at the Sheridan Shores Yacht Club, police said. A second man, a 74-year-old Arlington Heights resident, was hospitalized with non-life-threatening injuries.
Police said the explosion appears to be accidental.
"We heard what sounded like a sonic boom," said witness Martin Dawson. "It rattled the windows."
The man who was killed was identified as Mitchell Sroka. He appears to have died from injuries from the explosion, but the Cook County Medical Examiner's Office did not release a cause of death Saturday evening.
Other boaters said Sroka frequently came to the harbor to fish.
"Mitch is an avid fisherman, just a gentle giant. One of the biggest, warmest guys you could ever meet," said Todd Peterson, a friend of Sroka's.
The injured man was standing on the dock when the boat exploded. Sroka's body was recovered by divers. He was pronounced dead at the scene.
The boat was tethered to a fueling dock when it exploded, said Wilmette Fire Chief Benjamin Wozney.
Wozney said the boat was not being fueled at the time of the fire and the fueling station was unharmed in the incident. It is unclear what started the fire.
The boat was half-submerged and expected to be removed by a salvage company, Wozney said.
The Illinois Department of Natural Resources (IDNR), which handles watercraft incidents, is investigating.