Terpene synthase (TPS) is a critical enzyme responsible for the biosynthesis of terpenes, which possess diverse roles in plant growth and development. Although many terpenes have been reported in orchids, limited information is available regarding the genome-wide identification and characterization of the TPS family in the orchid, Dendrobium officinale. By integrating the D. officinale genome and transcriptional data, 34 TPS genes were found in D. officinale. These were divided into four subfamilies (TPS-a, TPS-b, TPS-c, and TPS-e/f). Distinct tempospatial expression profiles of DoTPS genes were observed in 10 organs of D. officinale. Most DoTPS genes were predominantly expressed in flowers, followed by roots and stems. Expression of the majority of DoTPS genes was enhanced following exposure to cold and osmotic stresses. Recombinant DoTPS10 protein, located in chloroplasts, uniquely converted geranyl diphosphate to linalool in vitro. The DoTPS10 gene, which resulted in linalool formation, was highly expressed during all flower developmental stages. Methyl jasmonate significantly up-regulated DoTPS10 expression and linalool accumulation. These results simultaneously provide valuable insight into understanding the roles of the TPS family and lay a basis for further studies on the regulation of terpenoid biosynthesis by DoTPS in D. officinale.