The present invention concerns a method for producing terpenes in fungi comprising the steps of (a) providing a modified terpene biosynthetic gene cluster inside a host cell, wherein one or more of the naturally occurring genes or promoters of the cluster have been replaced, truncated or removed, (b) providing a transcription factor inside the host cell, the transcription factor activating the terpene biosynthetic gene cluster; (c) cultivating said host in conditions allowing the expression of the transcription factor activating the cluster; and optionally (d) recovering the thus produced terpene product.

Disclosed are production of terpenoid compound and the strain used by, which belong to the technical field of bioengineering. The disclosure constructs an engineered strain of Serratia marcescens in production of hemiterpenes or monoterpenes, and the engineered strain of S. marcescens can produce linalool, isoprene, isopentenol, 1,8-cineole, -pinene, pinene, -terpinene, geraniol, (+)-limonene, ()-limonene, myrcene, -ocimene, sabinene, ()--bisabolol, farnesol, longifolene, valencene, -elemene, farnesene, patchoulol, pentalenene, and -santalene. In a 30 L fermenter, the yield of linalool produced by the engineered strain of S. marcescens is 40.72 g.Math.L.sup.1.