Authorities say the 61-year-old was emptying oil and grease from a tractor-trailer with a co-worker at the Energy Garden plant in Orlando, on Wednesday.
The man, who has not been identified, was standing on a grate when he slipped and fell into the container just after midnight, according to police.
His colleague desperately tried to pull him out but the man became overwhelmed by the fumes and slipped further down into the machine.
The Reedy Creek Fire Department pulled the man's body from the vat and an investigation into his death has been launched.
According to WKMG, Disney said the victim worked for Harvest Power, a company that recycles food waste for restaurants and hotels in central Florida, and converts it into renewable energy.
Meredith Sorensen, Harvest Power spokeswoman, said: "This was a tragic accident. We’re all deeply saddened by the loss of this coworker. We are in shock and grief, and figuring out what happened.
"We coordinated a pause in all operations for a moment of silence, and a reflection on the need for safety every minute, every hour, every day in our operations."
Local news outlets reported the facility is part of a district created to provide municipal services to the Disney theme park.
It marks the second fatal industrial accident on Disney property in the past month.
In July, employee Juan Alberto Ojeda, 33, was killed at the theme park's Pop Century resort after being crushed by an electric cart.
The vehicle technician had been working on the cart when he became trapped.
The young dad was declared dead at the scene.
In a statement, park president George Kalogridis said: "All of us at Walt Disney World Resort are deeply saddened today by the loss of one of our cast members.
"This is a tragic accident, and we are providing resources and care for those impacted and are working closely with the proper authorities to understand how this happened."
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