Mono- and diterpenoids are of great industrial and medical value as specialty chemicals and pharmaceuticals. Production of these compounds in microbial hosts, such as Escherichia coli, can be limited by intracellular levels of the polyprenyl diphosphate precursors, geranyl diphosphate (GPP), and geranylgeranyl diphosphate (GGPP). To alleviate this limitation, we constructed synthetic operons that express three key enzymes for biosynthesis of these precursors: (1) DXS,1-deoxy-d-xylulose-5-phosphate synthase; (2) IPPHp, IPP isomerase from Haematococcus pluvialis; and (3) one of two variants of IspA, FPP synthase that produces either GPP or GGPP. The reporter plasmids pAC-LYC and pACYC-IB, which encode enzymes that convert either FPP or GGPP, respectively, to the pigment lycopene, were used to demonstrate that at full induction, the operon encoding the wild-type FPP synthase and mutant GGPP synthase produced similar levels of lycopene. To synthesize di- or monoterpenes in E. coli using the GGPP and GPP encoding operons either a diterpene cyclase [casbene cyclase (Ricinus communis L) and ent-kaurene cyclase (Phaeosphaeria sp. L487)] or a monoterpene cyclase [3-carene cyclase (Picea abies)] was coexpressed with their respective precursor production operon. Analysis of culture extracts or headspace by gas chromatography-mass spectrometry confirmed the in vivo production of the diterpenes casbene, kaur-15-ene, and kaur-16-ene and the monoterpenes α-pinene, myrcene, sabinene, 3-carene, α-terpinene, limonene, β-phellandrene, α-terpinene, and terpinolene. Construction and functional expression of GGPP and GPP operons provides an in vivo precursor platform host for the future engineering of di- and monoterpene cyclases and the overproduction of terpenes in bacteria. © 2004 Wiley Periodicals, Inc.