Carotenoid β-hydroxylases attach hydroxyl groups to the β-ionone rings (β-rings) of carotenoid substrates, resulting in modified structures and functions of carotenoid molecules. We cloned and characterized two genes (each with three homeologs), HYD1 and HYD2, which encode β-hydroxylases in wheat. The results from bioinformatic and nested degenerate PCR analyses collectively suggest that HYD1 and HYD2 may represent the entire complement of non-heme diiron β-hydroxylases in wheat. The homeologs of wheat HYDs exhibited major β-ring and minor ε-ring hydroxylation activities in carotenoid-accumulating E. coli strains. Distinct expression patterns were observed for different HYD genes and homeologs in vegetative tissues and developing grains of tetraploid and hexaploid wheat, suggesting their functional divergence and differential regulatory control in tissue-, grain development-, and ploidy-specific manners. An intriguing observation was that the expression of HYD1, particularly HYD-B1, reached highest levels at the last stage of tetraploid and hexaploid grain development, suggesting that carotenoids (at least xanthophylls) were still actively synthesized in mature grains. This result challenges the common perception that carotenoids are simply being turned over during wheat grain development after their initial biosynthesis at the early grain development stages. Overall, this improved understanding of carotenoid biosynthetic gene expression and carotenoid metabolism in wheat grains will contribute to the improvement of the nutritional value of wheat grains for human consumption.