Tens of thousands of terpenoid natural products have been isolated from plants and microbial sources. Higher fungi (Ascomycota and Basidiomycota) are known to produce an array of well-known terpenoid natural products, including mycotoxins, antibiotics, antitumor compounds, and phytohormones. Except for a few well-studied fungal biosynthetic pathways, the majority of genes and biosynthetic pathways responsible for the biosynthesis of a small number of these secondary metabolites have only been discovered and characterized in the past 5-10 years. This chapter provides a comprehensive overview of the current knowledge on fungal terpenoid biosynthesis from biochemical, genetic, and genomic viewpoints. Enzymes involved in synthesizing, transferring, and cyclizing the prenyl chains that form the hydrocarbon scaffolds of fungal terpenoid natural products are systematically discussed. Genomic information and functional evidence suggest differences between the terpenome of the two major fungal phyla--the Ascomycota and Basidiomycota--which will be illustrated for each group of terpenoid natural products.