The 45-year-old's Honda Fireblade crashed in the opening practice session of the Jurby Motodrome racing meet on Saturday morning.
The Andreas Racing Association said Carswell sustained serious injuries in the crash and was taken to Noble's Hospital, where he later died.
An investigation into the crash is due to take place, the association said.
TT rider Gary Carswell has died after a crash during a practice race on the Isle of Man.