Summary: An affine vertex operator construction at an arbitrary level is presented which is based on a completely compactified chiral bosonic string whose momentum lattice is taken to be the (Minkowskian) affine weight lattice. This construction is manifestly physical in the sense of string theory, i.e., the vertex operators are functions of Del Giudice-Di Vecchia-Fubini (DFF) “oscillators” and the Lorentz generators, both of which commute with the Virasoro constraints. The authors obtain explicit representations of affine highest weight modules in terms of physical (DDF) string states. This opens new perspectives on the representation theory of affine Kac-Moody algebras, especially in view of the simultaneous treatment of infinitely many affine highest weight representations of arbitrary level within a single state space as required for the study of hyperbolic Kac-Moody algebras. A novel interpretation of the affine Weyl group as the “dimensional null reduction” of the corresponding hyperbolic Weyl group is given, which follows upon re-expression of the affine Weyl translations as Lorentz boosts.