Jason Schmidt, 31, of Jacobus in York County, Pa., was pronounced dead at the scene of the accident in Lower Providence Township.
Miguel Martinez, 38, of Pennsgrove, New Jersey, is being treated at Paoli Hospital.
Authorities say the men were part of a three-man crew working for Corrosion Control Corporation of Pedricktown, New Jersey on contract from Audobon Water Company, the owner of the tower.
The third man involved was able to call for help from the ground. Martinez was hanging inside the tower until he could be rescued.
"There had been some type of malfunction with the industrial equipment," said Lower Providence Township Fire Chief Bryan McFarland on Wednesday, "and we did have one victim that was approximately 40 to 60 feet in the air inside of an 80-foot water tower."
Authorities say Martinez was conscious and talking during the rescue.
The investigation into the incident continues. Representatives from OSHA were on the scene Wednesday and interviewed the third worker.