Metabolic engineering strategies for terpenoid production have mainly focused on bottlenecks in the supply of precursor molecules and cytotoxicity to terpenoids. In recent years, the strategies involving compartmentalization in eukaryotic cells has rapidly developed and have provided several advantages in the supply of precursors, cofactors and a suitable physiochemical environment for product storage. In this review, we provide a comprehensive analysis of organelle compartmentalization for terpenoid production, which can guide the rewiring of subcellular metabolism to make full use of precursors, reduce metabolite toxicity, as well as provide suitable storage capacity and environment. Additionally, the strategies that can enhance the efficiency of a relocated pathway by increasing the number and size of organelles, expanding the cell membrane and targeting metabolic pathways in several organelles are also discussed. Finally, the challenges and future perspectives of this approach for the terpenoid biosynthesis are also discussed.