A family of 40 terpenoid synthase genes ( AtTPS) was discovered by genome sequence analysis in Arabidopsis thaliana. This is the largest and most diverse group of TPS genes currently known for any species. AtTPS genes cluster into five phylogenetic subfamilies of the plant TPS superfamily. Surprisingly, thirty AtTPS closely resemble, in all aspects of gene architecture, sequence relatedness and phylogenetic placement, the genes for plant monoterpene synthases, sesquiterpene synthases or diterpene synthases of secondary metabolism. Rapid evolution of these AtTPS resulted from repeated gene duplication and sequence divergence with minor changes in gene architecture. In contrast, only two AtTPS genes have known functions in basic (primary) metabolism, namely gibberellin biosynthesis. This striking difference in rates of gene diversification in primary and secondary metabolism is relevant for an understanding of the evolution of terpenoid natural product diversity. Eight AtTPS genes are interrupted and are likely to be inactive pseudogenes. The localization of AtTPS genes on all five chromosomes reflects the dynamics of the Arabidopsis genome; however, several AtTPS genes are clustered and organized in tandem repeats. Furthermore, some AtTPS genes are localized with prenyltransferase genes ( AtGGPPS, geranylgeranyl diphosphate synthase) in contiguous genomic clusters encoding consecutive steps in terpenoid biosynthesis. The clustered organization may have implications for TPS gene evolution and the evolution of pathway segments for the synthesis of terpenoid natural products. Phylogenetic analyses highlight events in the divergence of the TPS paralogs and suggest orthologous genes and a model for the evolution of the TPS gene family.