Volatile terpenes are ones of the characteristic aromas of Japanese pepper (Zanthoxylum piperitum). It has been hypothesized that the specialized epithelial cells surrounding the secretory cavities of Japanese pepper fruits and leaves are responsible for the synthesis of monoterpenes and sesquiterpenes, which are generally produced by terpene synthases (TPSs); however, direct evidence for the formation of terpenes in Japanese pepper remains elusive. Here we report that monoterpenes and sesquiterpenes accumulate inside the secretory cavities of Japanese pepper leaves, but not in other parts of leaf tissues that do not include secretory cavities. We have obtained cDNAs for ZpTPS1 and ZpTPS2, which are responsible for biosynthesis of the sesquiterpenes β-caryophyllene and germacrene D, respectively, in Japanese pepper. In addition, we also identified a cDNA for the monoterpene synthase ZpTPS3. Expression of ZpTPS3 in Escherichia coli in addition to Agrobacterium-mediated transient ZpTPS3 expression in Nicotiana benthamiana demonstrated the catalytic activity of ZpTPS3 to form β-phellandrene as the major product. In situ hybridization in Japanese pepper leaf tissue revealed that ZpTPS3 transcript specifically accumulated in the epithelial cells surrounding secretory cavities. Expression of ZpTPS3 in epithelial cells was only detectable during early stages of cavity development, whereas the formation of volatile terpenes occurred at a constant rate throughout the expansion of secretory cavities. Our studies have improved the understanding of the currently uncharacterized processes controlling volatile terpene biosynthesis in Japanese pepper leaves.