Macrocyclic sesqui- (C15) and diterpenes (C20) are a functionally diverse group of natural products with versatile bioactivities encompassing anticancer, antimicrobial and insecticidal agents. Structural complexity prevents economically efficient total synthesis of these higher terpenoids. Heterologous production in recombinant whole-cell biocatalysts is an emerging alternative. Conventional cell systems (i.e., Escherichia coli and Saccharomyces cerevisiae) frequently suffer from low volumetric yields. However, recent combinations of metabolic, enzyme and process engineering in conjunction with systems biology allow significant improvements towards economically viable processes. This Review analyzes research trends in the dynamic fields of terpene-centered microbial cell systems and enzyme engineering. An outlook is given on emerging microbial hosts, which may simplify cellular engineering towards higher product titers.