This year's Dakar Rally takes competitors from the Argentine port city of Mar de Plata all the way to Lima, Peru.
Police officials said Martínez Boero died as he was being transported by helicopter to a hospital in Mar del Plata.
Details of the crash were not immediately available.
Organizers said the 38-year-old died from head and chest injuries during a crash on the first stage.
The stage from the Atlantic coastal city of Mar del Plata was won by Leonid Novitskiy of Russia in the cars category, and Francisco López of Chile in bikes.
Novitskiy finished the special stage in 32 minutes, 12 seconds — five seconds ahead of Polish driver Krzysztof Holowczyc. Both are driving Minis.
López on an Aprilla crossed the line in 32:37, 14 seconds in front of defending champion Marc Coma of Spain on a KTM.
The Dakar Rally began Sunday with racers embarking on the first leg from the Atlantic coastal city of Mar del Plata to Santa Rosa, Argentina. The race, considered one of the most dangerous in motor sports, ends on Jan. 15 in Lima, Peru.
The 38-year-old Martínez Boero was participating in his second Dakar Rally.
This is the fourth consecutive year the event is being held in South America. The rally was held in Africa until 2007 but moved for security reasons to South America in 2009. The race was not held in 2008.
Fatalities occur often in the Dakar Rally.
Last year a man died when his small truck collided with a car participating in the rally. In 2010, a woman watching the race was struck and killed by a vehicle taking part in the race.
In 2009, the body of French motorcyclist Pascal Terry was found after he had been missing for three days following the second stage of the race.
Details surrounding Martinez Boero's death were not clear, but reports said he may have fallen after running off the course and striking an open sewer line.
"The organizers of the rally offer their heartfelt condolences to his family and loved ones," race officials said in a statement.
Police said Martinez Boero died as he was transported by helicopter to a hospital in Mar del Plata. This was his second Dakar. Officials said he withdrew during the sixth stage of last year's rally.
This is the fourth consecutive year the event is being held in South America. The rally was held in Europe and Africa until the 2008 race was canceled because of fears of terrorism. It was moved to South America the next year.
The route this year is different to the first three, which were loop courses from the Argentine capital Buenos Aires to Chile, and then back to Buenos Aires.
This year the race begins in Argentina, passes through Chile, and finishes in Lima, Peru, on Jan. 15.
Based on reporting by the Associated Press.