While the structure of a variety of viruses has been resolved at atomistic detail, their assembly pathways remain largely elusive. Key unresolved issues in assembly are the nature of the critical nucleus starting particle growth, the subsequent selfassembly reaction and the manner in which the viral genome is compacted. These issues are difficult to address in bulk approaches and are effectively only accessible by tracking the dynamics of assembly of individual particles in real time, as we show here. With a combination of single-molecule techniques we study the assembly into rod-shaped virus-like particles (VLPs) of artificial capsid polypeptides, de-novo designed previously. Using fluorescence optical tweezers we establish that oligomers that have pre-assembled in solution bind to our DNA template. If the oligomer is smaller than a pentamer, it performs one-dimensional diffusion along the DNA, but pentamers and larger oligomers are essentially immobile and nucleate VLP growth. Next, using real-time multiplexed acoustic force spectroscopy, we show that DNA is compacted in regular steps during VLP growth. These steps, of ~30 nm of DNA contour length, fit with a DNA packaging mechanism based on helical wrapping of the DNA around the central protein core of the VLP. By revealing how real-time, single particle tracking of VLP assembly lays bare nucleation and growth principles, our work opens the doors to a new fundamental understanding of the complex assembly pathways of natural virus particles.