The flight instructor reported that he and the student pilot were conducting a familiarization flight. After an uneventful takeoff and when the gyroplane was about 400 ft above ground level, she heard a “loud bang,” followed by severe vibrations and a total loss of engine power. She chose to initiate an emergency landing and turned right back toward the runway and landed uneventfully. During the landing roll, she saw that the gyroplane was on fire. The gyroplane came to a stop, and the fire was extinguished. Examination of the gyroplane revealed that the muffler, coolant line, and both carburetors were either fracture separated or shaken loose. One of the propeller blades and part of the propeller hub were missing, which likely resulted in an imbalance and subsequent severe vibrations and extensive vibration-related damage. One of the propeller blades had impacted a rotor blade. A fuel line was found damaged and open, which likely started the in-flight fire, and the fuselage and horizontal stabilizer exhibited substantial damage. Examination of the propeller and propeller hub components revealed no evidence that the propeller blade fractured before the hub failed. The propeller hub fractured due to fatigue cracking that initiated at a network of corrosion pits along the surface of the propeller blade root seat. The internal tube exhibited a rough surface texture and an approximate 45° slant orientation. Tube material adjacent to the tube fracture had thinned and exhibited deformation in multiple locations. The periphery of the angled root seat exhibited chatter marks on the root of the propeller blade. Based on the characteristics of the fracture surfaces and the chatter marks, it is likely that the fatigue cracks propagated due to high-cycle rotational and vibrational loads from normal propeller operation. Due to the nature of the high-cycle fatigue and the inability to determine the loads and rpms of the propeller during the accident flight, the investigation could not determine exactly when the fatigue cracking initiated. Examination of the corrosion pits found elements in them consistent with common salts. The tight fit of the blade roots against the hub seats could have led to crevice corrosion if moisture and salt had penetrated the area. In addition, contact with some composite components (such as carbon fiber) can create galvanic couples with aluminum, which will become susceptible to preferential corrosion. Based on the evidence, it is likely that the corrosion pitting along the propeller blade root seats led to the initial cracking, which was propagated by high-cycle fatigue. Further, it is likely that the propeller hub design was not adequate because it did account for the repetitive stresses that occur during normal operation.