More than 70,000 different terpenoid structures are known so far; many of them offer highly interesting applications as pharmaceuticals, flavors and fragrances, or biofuels. Extraction of these compounds from their natural sources or chemical synthesis is-in many cases-technically challenging with low or moderate yields while wasting valuable resources. Microbial production of terpenoids offers a sustainable and environment-friendly alternative starting from simple carbon sources and, frequently, safeguards high product specificity. Here, we provide an overview on employing recombinant bacteria and yeasts for heterologous de novo production of terpenoids. Currently, Escherichia coli and Saccharomyces cerevisiae are the two best-established production hosts for terpenoids. An increasing number of studies have been successful in engineering alternative microorganisms for terpenoid biosynthesis, which we intend to highlight in this review. Moreover, we discuss the specific engineering challenges as well as recent advances for microbial production of different classes of terpenoids. Rationalizing the current stages of development for different terpenoid production hosts as well as future prospects shall provide a valuable decision basis for the selection and engineering of the cell factory(ies) for industrial production of terpenoid target molecules.