Video footage from the launch at the Baikonur Cosmodrome shows a large plume of smoke coming from the rocket at the moment it failed and footage from inside the capsule shows the two astronauts being violently shaken about.
The astronauts were to dock at the International Space Station six hours after the launch and join an American, a Russian and a German now aboard the station.
Search and rescue teams were dispatched to the landing location and collected the astronauts who made it safely back.
Just two minutes after liftoff, the crew of the Soyuz MS-10 found themselves in a situation that every astronaut since the beginning of the manned space program has trained for, but very few have ever had to face: a failure during launch.
The Russian space industry has suffered a series of problems in recent years, including the loss of a number of satellites and other spacecraft.
A spokesman for Russian President Vladimir Putin said, "Thank God the crew is alive" after they had landed safely.
Former military pilots Ovchinin and Hague had been set to join the ESA's Gerst, NASA's Serena Aunon-Chancellor and Sergey Prokopyev of Roscosmos following a six-hour flight.
The mission failure is stunning for the Soyuz rocket, which only had two launch failures prior to Thursday - one in 1975 and one in 1983. This was Ovchinin's second trip to the station, and Hague's first trip. Officials are also investigating the odd hole recently found in a Soyuz spacecraft aboard the International Space Station. Ovchinin and Hague were both traveling to the ISS to join the three astronauts now aboard - Gerst, NASA's Serena Auñón-Chancellor, and Roscosmos' Sergey Prokopyev.
Russian officials said all manned space flight missions would be suspended until investigators figure out what went wrong.
Soon afterwards both space agencies were reporting the astronauts were in good health.
Back in 2015 Progress spacecraft - unmanned transport spacecraft that sent supplies to the ISS - had problems on launchers similar to the Soyuz rocket that experienced problems on Thursday.
The space agency tweeted: "There's been an issue with the booster from today's launch". He didn't say if he suspected any of the current crew of three Americans, two Russians and a German aboard the station of malfeasance.
The Russian Soyuz MS-09 crew craft and the Northrop Grumman Cygnus space freighter attached to the International Space Station.
Reuters Russian cosmonaut Alexey Ovchinin (R) and US astronaut Nick Hague (L) disembark from a plane, after the Soyuz spacecraft made an emergency landing following a failure of its booster rockets, as they arrive at Baikonur airport, Kazakhstan, Oct. 11, 2018.
In 2003, when Expedition 6 crew members Ken Bowersox and Don Pettit and their cosmonaut counterpart Nikolai Budarin returned from a five-month stay aboard the ISS, their automated controls failed, forcing the re-entry in ballistic mode. Then, a rocket malfunctioned shortly before launch, and the crew vehicle was ejected to safety.