Sandalwood oil is one of the world's most highly prized essential oils, appearing in many high-end perfumes and fragrances. Extracted from the mature heartwood of several Santalum species, sandalwood oil is comprised mainly of sesquiterpene olefins and alcohols. Four sesquiterpenols, α-, β-, and epi-β-santalol and α-exo-bergamotol, make up approximately 90% of the oil of Santalum album. These compounds are the hydroxylated analogues of α-, β-, and epi-β-santalene and α-exo-bergamotene. By mining a transcriptome database of S. album for candidate cytochrome P450 genes, we cloned and characterized cDNAs encoding a small family of ten cytochrome P450-dependent monooxygenases annotated as SaCYP76F37v1, SaCYP76F37v2, SaCYP76F38v1, SaCYP76F38v2, SaCYP76F39v1, SaCYP76F39v2, SaCYP76F40, SaCYP76F41, SaCYP76F42, and SaCYP76F43. Nine of these genes were functionally characterized using in vitro assays and yeast in vivo assays to encode santalene/bergamotene oxidases and bergamotene oxidases. These results provide a foundation for production of sandalwood oil for the fragrance industry by means of metabolic engineering, as demonstrated with proof-of-concept formation of santalols and bergamotol in engineered yeast cells, simultaneously addressing conservation challenges by reducing pressure on supply of sandalwood from native forests.