From Nature:
Scientists have succeeded in stitching together an entire bacterial genome, creating in the lab the full set of instructions needed to make a living thing. The stage is now set for the creation of the first artificial organism — and it could be achieved within the year. The genome for the pathogenic bacterium Mycoplasma genitalium was made in the laboratory by Hamilton Smith and his colleagues at the J. Craig Venter Institute in Rockville, Maryland. The genome has 582,970 of the fundamental building blocks of DNA, called nucleotide bases, making it more than a factor of ten longer than the previous-longest stretch of genetic material created by chemical means.
Venter and his colleagues have already managed to transplant the DNA from one bacteria into another, making it change species. These bacteria were closely related to M. genitalium. If the transplant can be repeated with a man-made genome adapted from M. genitalium, the result could qualify as the first artificial life form. DNA is synthesized by sequentially adding one of the four nucleotide bases (denoted A, T, G and C) to a growing chain in a specified sequence. It is beyond current capabilities to join up half a million or so bases in a single, continuous process — the strand becomes unstable and breaks. So the researchers ordered 101 custom-made fragments or ‘cassettes’, each of about 5,000–7,000 bases each, from companies Blue Heron Biotechnology in Bothell, Washington; DNA2.0 in Menlo Park, California; and GENEART of Toronto, Ontario. These were designed with overlapping sequences so they could be stuck together later by enzymes.
More here.