'There was an inquiry, of course; it turned out that there were no lessons learned from the shuttle disaster that were not already known beforehand. Seventeen years later, NASA would have to be subjected to those exact same painful lessons all over again when the Columbia disintegrated over Texas.(link)
What actually caused the Challenger disaster was that one of the Solid Rocket Boosters collided with the main tank of the shuttle. The main tank, being a huge tank of liquid hydrogen rocket fuel, exploded.
The SRB collided with the main tank due to a loosening of a connection with the main tank. This was believed to have been the cause of an O-ring failure, which is supposed to prevent the escape of gases laterally out of the SRB.
The O-ring is said to have failed because of the much cooler than normal temperatures the Shuttle launched at. NASA had received warnings of possible O-ring failures in the past, but had ignored them as an acceptable flight risk.
The most disturbing story I've heard about the tragedy was that the crew may have survived the initial explosion. Some say that the crew compartment may have stayed intact and point to some video evidence of such. That would mean that there may have been crew members alive, but probably unconcious when the crew compartment hit the water.
Either way, yesterday's anniversary is a reminder of exactly what the stakes are for space exploration and NASA. It's one of those reminders that it isn't just some debate about some thing that exists out there somewhere. That NASA safety issues aren't just theoretical Engineering points of discussion. It reminds us that this is real, and that what NASA does is not a game.