Terpenoids are the largest class of natural products and are typically isolated from natural sources. However, heterologous expression of terpene synthases in microbial hosts such as E. coli or Saccharomyces cerevisiae has become an attractive alternative. S. cerevisiae has an intact sterol biosynthetic pathway, and many of the intermediates also serve as precursors for terpene synthases. Metabolic engineering efforts focus on optimizing product yields through increasing carbon flux through the desired pathway, removing competing enzymes, or altering enzymatic activity. This work describes the metabolic engineering of S. cerevisiae to enhance terpene production by exploiting these three approaches. Diterpene synthases were expressed in a yeast strain previously reported to accumulate the diterpene precursor geranylgeranyl pyrophosphate (GGPP). The strains produced milligram amounts of GGPP hydrolysis products geranylgeraniol and geranyllinalool, as well as the GGPP cyclization products ent -copalyl pyrophosphate, ent-kaurene, and abietadiene. Because diterpene production is limited by transit peptides targeting diterpene synthases into plastids, protein expression was increased by co-expressing a chloroplast processing enzyme in two different diterpene-producing strains. The in vivo-generated mature diterpene synthases functioned more effectively, thereby increasing cyclization yield. This thesis also describes a new method for controlling farnesyl pyrophosphate (FPP) hydrolysis product profile by adjusting media pH. Hydrolysis was found to be partially controlled by a phosphatase DPP1, however a majority of FPP hydrolysis is non-enzymatic. In a squalene synthase deletion strain, FPP accumulates and hydrolyzes readily to farnesol and nerolidol, and the ratios of these products are determined by the pH of the media. Finally, a yeast strain was constructed to increase production of the 30-carbon triterpene precursors oxidosqualene (OS) and dioxidosqualene (DOS) by over-expressing the sterol biosynthesis rate-limiting enzyme 3-hydroxy-3-methylglutaryl CoA reductase (HMG1) in a lanosterol synthase deletion background. This strain accumulated twenty times more OS and DOS than the strain with only the native HMG1. Over-expression of squalene epoxidase (ERG1) in a lanosterol synthase background greatly enhanced the levels of DOS compared to OS.