Terpenoids are known to have many important biological and physiological functions. Some of them are also known for their pharmaceutical significance. In the late nineties after the discovery of a novel non-mevalonate (non-MVA) pathway, the whole concept of terpenoid biosynthesis has changed. In higher plants, the conventional acetate-mevalonate (Ac-MVA) pathway operates mainly in the cytoplasm and mitochondria and synthesizes sterols, sesquiterpenes and ubiquinones predominantly. The plastidic non-MVA pathway however synthesizes hemi-, mono-, sesqui- and di-terpenes, along with carotenoids and phytol chain of chlorophyll. In this paper, recent developments on terpenoids biosynthesis are reviewed with respect to the non-MVA pathway.