Background: Phoebe bournei is a potential medicinal plant whose essential oil (EO) from leaves has potential inhibitory activities against some bacterium, tumor, and has a certain potential for hypoglycemic activity. Fertilization is a common and effective method to increase plant biomass, which can increase the raw material of essential oil, but has a certain impact on the composition and biological activity of plant essential oil. Results: The main components are sesquiterpenes in the essential oils from leaves and twigs. The yield of the essential oils and the content of their main components can be modulated by compost and compound fertilizer, to different degrees, and minor differences were registered among the categories of the components in essential oils. However, changes were strongly mirrored in some main components of essential oils. The content of the primary (+) - calarene in the leaf EO were strongly increased by compost, but the opposite happened by compound fertilizer. On the contrary, the effect of compound fertilizer was more significant on the main components of twig essential oil than compost. The transcriptome sequencing results of P. bournei showed that the total number of DEGs in twigs and leaves treated with compost were significantly more than that with compound fertilizer. No change was found in the expression of genes regulating principal components. However, the expression of several key genes regulating the upstream substrates for the synthesis of the sesquiterpenes was significantly changed: the expression of two key speed limiting enzymes genes (DXS and HMGR) and two important branch-point enzyme genes (FPPS and GGPPS) was significantly down regulated, while the expression of gene (HMGS) was significantly up-regulated.Conclusion: The expression levels of genes (DXS2, HMGR, FPPS and GGPPS) were significantly down regulated in leaves treated with compost, resulting in the changes of the yield and main components of the leaf essential oil. The effect of compost was more significant on the synthesis of the essential oil from P. bournei leaves than that of compound fertilizer.