Terpenoids are natural products with over 80,000 identified compounds, exhibiting vast structural diversity naturally found in plants, fungi, algae, and some bacteria. They play crucial roles in various biological processes, ranging from fundamental metabolic functions to growth and development. They are important compounds for various industries due to their diverse applications, including their use as flavor and fragrance agents, as pharmaceutical compounds, and as precursors for the synthesis of important chemicals such as rubber and resins. The biosynthesis of terpenoids is intricately regulated at multiple levels, including transcriptional, translational, and posttranslational levels. Factors such as developmental stages, circadian rhythms, hormones, and biotic and abiotic stresses influence terpenoid synthesis in plants. Hence, there is an urgent requirement to develop more sustainable approaches for synthesizing terpenoids and their derivatives. This necessity arises from their limited yields, fluctuating contents and quantities, and the complicated chemical synthesis processes. Biotransformation, also known as biocatalysis, is a process where biological catalysts such as whole cells or enzymes are used to convert substrates into valuable products. This method is crucial in various industries such as pharmaceuticals, food production, and waste management, offering environmentally friendly and efficient solutions for chemical transformations and toxic substances. In this context, it is very important to focus on biotransformation studies to utilize the full potential of terpenoids and their derivatives in various applications. This chapter aims to provide information on the classification, general properties, biosynthesis, functions, and biotransformation of terpenoids based on recent literature.