Secondary metabolism plays an important role in the adaptation of plants to their environments, particularly by mediating bio-interactions and protecting plants from herbivores, insects, and pathogens. Terpenoids form the largest group of plant secondary metabolites, and their biosynthesis and regulation are extremely complicated. Terpenoids are key players in the interactions and defense reactions between plants, microorganisms, and animals. Terpene compounds are of great significance both to plants themselves and the ecological environment. On the one hand, while protecting plants themselves, they can also have an impact on the environment, thereby affecting the evolution of plant communities and even ecosystems. On the other hand, their economic value is gradually becoming clear in various aspects of human life; their potential is enormous, and they have broad application prospects. Therefore, research on terpenoids is crucial for plants, especially crops. This review paper is mainly focused on the following six aspects: plant terpenes (especially terpene volatiles and plant defense); their ecological functions; their biosynthesis and transport; related synthesis genes and their regulation; terpene homologues; and research and application prospects. We will provide readers with a systematic introduction to terpenoids covering the above aspects.