The float was carrying veterans and their wives as part of the annual Show of Support parade in the town of Midland, West Texas.
The returning heroes were on their way to a banquet in their honour when the crash happened at the Union Pacific railroad crossing at about 4:30pm local time on Thursday.
The float is understood to have taken the full force of the train and, although some people managed to jump to safety, four people were killed and several others injured.
Horrified spectators at the parade could only watch as the carnage unfolded. A full investigation will now take place.
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