Dr Craig Venter says his researchers built a DNA strand from scratch and inserted it into a simple bacterium, creating so-called synthetic life.
Applications of the study include the manufacture of organisms designed for specific tasks, such as making vaccines or cleaning up pollution.
A report published in the Science journal details how the team effectively stimulated a yeast cell into taking on a new life.
Scientists at first made short strands of DNA and then put them together to form a chromosome, which was then inserted into a bacterium, replacing its native DNA.
They found the bacterium took on the appearance and behaviour of the transplanted chromosome, generating different proteins and multiplying.
"This is the first synthetic cell that's been made, and we call it synthetic because the cell is totally derived from a synthetic chromosome," Dr Venter said.
"This is an important step we think, both scientifically and philosophically.
"It's certainly changed my views of the definitions of life and how life works."
Sky's health correspondent Thomas Moore said the scientists have created a form of life never before seen on the planet.
"Other groups are working on it around the world, but [Dr Venter's] the first to have done this," Moore said.
"He's the man who has opened up a new chapter, where we are not just looking at life that has evolved - but life that is created in a laboratory.
"It opens up new ethical dilemmas."
Nottingham Kini: This finding will certainly make the arrogant become more arrogant (See, we can create!) and the humble servant and learned man will see this as a sign of the Almighty (even creating a single cell is difficult...so who is governing the whole world at this moment?)