The present invention provides a method for scarless in vitro DNA assembly using thermostable exonucleases and ligase, which relates to the field of genetic engineering. The present invention provides a fast method for assembling DNA subfragments with homologous ends, which employs thermostable polymerases and ligase in a thermal cycle of denaturation, annealing, digestion and ligation. After denaturation, DNA subfragments are assembled together via annealing of the homologous end sequences, the unpaired single-stranded overhangs are digested by polymerases, and the resulting nicked gaps are sealed by a ligase. Using this method, 2-6 DNA subfragments were successfully assembled within two hours. This method can be used in conventional DNA recombination and be adapted to high throughput assembly operations. In addition, combinatorial mutations can be easily introduced into the assembled sequence by use of primers with mutated bases. It is particularly suitable for making enzyme and synthetic pathways mutation libraries with high diversity, which can be used in directed evolution to screen for enzymes and synthetic pathways with desirable properties.