On May 27, 2016, at 0915 central daylight time, a Cessna 402B airplane, N76MD, experienced an in-flight left engine fire while maneuvering near the Joe Foss Field Airport (FSD), Sioux Falls, South Dakota. The airline transport pilot and commercial pilot were not injured, and the airplane sustained substantial damage to the left wing. The airplane was operated by Encore Air Cargo, Sioux Falls, South Dakota, as a 14 Code of Federal Regulations Part 91 instructional flight. Visual meteorological conditions prevailed at the time of the accident and a company flight plan was filed. The local flight departed FSD at 0840. According to the airline transport pilot, while maneuvering for a practice approach, the flight crew noticed a rough running left engine. The commercial pilot activated the auxiliary fuel pump, and the engine then operated without issue. Shortly thereafter, the left engine tachometer went to zero and the commercial pilot, who was seated in the left seat, noticed flames emitting from the left engine cowling. The flight crew declared an emergency and secured the left engine. The airplane landed uneventfully and taxied to the company ramp. Postaccident examination of the airplane by a Federal Aviation Administration inspector and company mechanics revealed substantial damage to the left wing structure and firewall. In addition, the number 4 cylinder was burned through at the exhaust port. The number 6 cylinder valve cover displayed thermal damage consistent with the observed damage to the number 4 cylinder. The number 4 cylinder was removed and sent to Continental Motors Group, Mobile, Alabama, for further examination. On October 13, 2016, the number 4 cylinder was examined by the Continental Motors Group under the supervision of a National Transportation Safety Board investigator. Examination of the cylinder showed a burned through area at the cylinder head exhaust port, consistent with a preexisting crack that allowed exhaust gas to erode the cylinder head. A preexisting crack could not be determined due to the erosion of the burned through area. In addition to the burned through area, a crack was noted on the opposite side of the exhaust port. According to the maintenance records, the number 4 cylinder was overhauled 178.3 hours prior to the accident.