Summary Diatoms are eukaryotic, unicellular algae that are responsible for c. 20% of the Earth's primary production. Their dominance and success in contemporary oceans have prompted investigations on their distinctive metabolism and physiology. One metabolic pathway that remains largely unexplored in diatoms is isoprenoid biosynthesis, which is responsible for the production of numerous molecules with unique features. We selected the diatom species Haslea ostrearia because of its characteristic isoprenoid content and carried out a comprehensive transcriptomic analysis and functional characterization of the genes identified. We functionally characterized one farnesyl diphosphate synthase, two geranylgeranyl diphosphate synthases, one short‐chain polyprenyl synthase, one bifunctional isopentenyl diphosphate isomerase – squalene synthase, and one phytoene synthase. We inferred the phylogenetic origin of these genes and used a combination of functional analysis and subcellular localization predictions to propose their physiological roles. Our results provide insight into isoprenoid biosynthesis in H. ostrearia and propose a model of the central steps of the pathway. This model will facilitate the study of metabolic pathways of important isoprenoids in diatoms, including carotenoids, sterols and highly branched isoprenoids.