Cyclic diterpenoids are commonly biosynthesized from geranylgeranyl diphosphate (GGDP) through the formation of carbon skeletons by specific cyclases and subsequent chemical modifications, such as oxidation, reduction, methylation, and glucosidation. A variety of diterpenoids are produced in higher plants and fungi. Rice produces four classes of diterpene phytoalexins, phytocassanes A to E, oryzalexins A to F, oryzalexin S, and momilactones A and B. The six diterpene cyclase genes involved in the biosynthesis of these phytoalexins were identified and characterized. Fusicoccin A was produced by the phytopathogenic Phomopsis amygdali and served as a plant H(+)-ATPase activator. A PaFS, encoding a fungal diterpene synthase responsible for fusicoccin biosynthesis, was isolated. The PaFS is an unusual chimeric diterpene synthase that possesses not only terpene cyclase activity (the formation of fusicoccadiene, a biosynthetic precursor of fusicoccin A), but also prenyltransferase activity (the formation of GGDP). Thus, we identified a unique multifunctional diterpene synthase family in fungi.