The green microalga Botryococcus braunii is considered a promising biofuel feedstock producer due to its prodigious accumulation of hydrocarbon oils that can be converted into fuels. B. braunii Race L produces the C40 tetraterpenoid hydrocarbon lycopadiene via an uncharacterized biosynthetic pathway. Structural similarities suggest this pathway follows a biosynthetic mechanism analogous to that of C30 squalene. Confirming this hypothesis, the current study identifies C20 geranylgeranyl diphosphate (GGPP) as a precursor for lycopaoctaene biosynthesis, the first committed intermediate in the production of lycopadiene. Two squalene synthase (SS)-like complementary DNAs are identified in race L with one encoding a true SS and the other encoding an enzyme with lycopaoctaene synthase (LOS) activity. Interestingly, LOS uses alternative C15 and C20 prenyl diphosphate substrates to produce combinatorial hybrid hydrocarbons, but almost exclusively uses GGPP in vivo. This discovery highlights how SS enzyme diversification results in the production of specialized tetraterpenoid oils in race L of B. braunii.