Private space company Blue Origin has successfully launched and landed an upgraded rocket and a new crew capsule that it bills as having "the largest windows in space."

The seventh flight of the company's New Shepard suborbital spacecraft at the company's West Texas launch site Tuesday carried a test dummy called Mannequin Skywalker, equipped with sensors.

"He had a great ride," tweeted Jeff Bezos, founder of Blue Origin and Amazon.com, about the launch Tuesday.

<a href="https://twitter.com/hashtag/NewShepard?src=hash&ref_src=twsrc%5Etfw">#NewShepard</a> had a successful first flight of Crew Capsule 2.0 today. Complete with windows and our instrumented test dummy. He had a great ride. <a href="https://twitter.com/blueorigin?ref_src=twsrc%5Etfw">@BlueOrigin</a> <a href="https://t.co/PZHXWXjuw9">pic.twitter.com/PZHXWXjuw9</a> —@JeffBezos

Twelve commercial, research and education payloads were also on board, the company said.

It was the first time the company launched a crew capsule with real windows, measuring 73 centimetres wide and 110 centimetres tall – that the company hopes will attract space tourists for suborbital rides. The previous test capsule had windows painted on.

The seventh flight of the company’s New Shepard suborbital spacecraft, which took place on Tuesday, carried a test dummy called “Mannequin Skywalker” equipped with sensors to measure the effects of the flight. (Blue Origin)

It was also the first time the company equipped the rocket with its next-generation booster. The rocket released the capsule 98 kilometres above the company's West Texas launch site before coming straight back down for a landing.

The capsule landed using a parachute, and hit the ground at about 1.6 km/h.

The company had previously launched and landed the New Shepard system on five unmanned test flights. The most recent was in October 2016, when the company tested its capsule's escape system, and was surprised that the rocket landed intact instead of tipping over from the capsule's exhaust.

This was the first launch using the New Shepard's next-generation booster. The rocket released the crew capsule 98 kilometres above the company’s West Texas launch site before coming straight back down for a landing. (Blue Origin)

It has said it hopes to start taking paying passengers on suborbital flights in 2018, but has not said how much tickets will cost. The pilotless autonomous system is designed to fly six passengers.