The 22-year-old was fishing with a party including his brother and nephew in a boat off Hartlepool Headland.
Police said his foot got tangled in fishing net ropes and he fell into the water at about 18:45 BST on Friday.
He was in the water for a short time before an RNLI crew came to his aid, but despite their efforts he died. The Coastguard and air ambulance were also involved in the rescue effort.
The RNLI said the man had been setting lobsterpots when the accident happened.
A man died after falling overboard on a fishing trip off Hartlepool.