The incident happened in the Antiville estate in Larne, Co Antrim, on Saturday night.
The man who died has been named locally as John Steele, who was from the area.
Police and ambulance personnel attended the scene after the fatal incident, which happened just after 9.30pm.
The bonfire, constructed from stacked wooden pallets, is more than 50 feet tall.
It is one of around 250 being built in loyalist areas across Northern Ireland ahead of traditional “Eleventh Night” celebrations.
The fires are lit to usher in the main date in the Protestant loyal order parading season – the Twelfth of July.
The construction of the Antiville fire was nearing completion when the incident happened.
Mr Steele, who was believed to be aged in his mid-30s, was pronounced dead at the scene.
Police maintained a low-key presence at the bonfire site on Sunday morning.
MP for the area Sammy Wilson, who attended the scene on Saturday night, said the community is in shock.
“My thoughts and sympathy are with this man’s family,” the DUP MP told the PA news agency.
“It is a real tragedy at what is a special time of year for people in the loyalist community.
“The family are well-known in the area, and I am sure this will be greatly felt within the community.”
The bonfire is expected to be removed from the area following the accident and a vigil has been arranged at the site on Sunday night.
Mayor of Mid and East Antrim council, Noel Williams, extended his condolences following the death.
“The loss of a young man’s life in an accident at a bonfire site in Larne is shocking and my thoughts are with his heartbroken loved ones,” he said.
“The community is hurting and my prayers are with everybody impacted by this awful tragedy.”
Stormont Justice Minister and Alliance Party leader Naomi Long tweeted:
“Heartbreaking news that a young man has lost his life in a fall from a bonfire. Thinking of his family, friends and the wider community as they come to terms with this tragic loss of life.
“I hope people will give them space to grieve privately at such a difficult time.”
Police have appealed for witnesses to come forward.
Police Service of Northern Ireland (PSNI) Inspector Adrian Bryan said: “We understand that the man was assisting in the building of the bonfire when this tragic accident occurred. Our thoughts are very much with his family at this time.”
The fatal fall in Antiville comes as Larne had been making headlines for another bonfire in the town.
Bonfire builders in the nearby Craigyhill estate are attempting to break a world record for the tallest bonfire, which currently stands at 198 feet.
The builders said they will continue with their record bid in tribute to the man’s memory.
Twelfth commemorations in Northern Ireland mark the victory of Protestant King William of Orange over Catholic King James II at the Battle of the Boyne, north of Dublin, in 1690 – a triumph that secured a Protestant line of succession to the British Crown.