Taiwan's Central News Agency said 19-year-old college student Liu Chih-wei died early in the morning after suffering burns over 90 per cent of his body.
A 20-year-old woman died on Monday after suffering similar injuries when coloured powder sprayed from a stage caught fire at the party on Saturday night.
The report said Liu had been a design student at the College of Maritime Technology in Taiwan's capital, Taipei.
Investigators are looking into whether a spark might have triggered the explosion of coloured corn powder thrown into the dancing crowd at the Formosa Water Park along the island's west coast on the outskirts of Taipei.
Taiwan has since banned the use of flammable powders at all public activities.
