After the end of the very successful operation of the TESLA Test Facility Phase I in November 2002, the modification of TTF into a VUV-FEL user facility took place during the year 2003. The injector complex was completely modified. Presently 5 cryomodules have been installed. For bunch length measurements there is a special S-band structure driven by a SLAC 5045 Klystron and an Electro-Optical-Sampling Experiment. Six undulator modules of 30 m total length have been installed. In one cavity of the first module an accelerating gradient of 35 MV/m with beam could be demonstrated. The last two modules have been operated up to the average gradient of 25 MV/m.
Emittance measurements show values near 2 pi mm mrad. In January 2005 first successful lasing of the SASE FEL was observed at 32 nm wavelength. This is the shortest wavelength achieved with a FEL so far and the first step to a user facility designed for wavelengths down to 6 nm. By May photon pulses with the peak energy of 20 μJ and average energies around 5 μJ had been produced during many runs. The corresponding peak power of the short pulses of 25 fs FWHM was at the Gigawatt level. First user experiments are foreseen for August 2005.