Plants synthesize isopentenyl diphosphate (IPP) via the mevalonate pathway and the methylerythritol phosphate (MEP) pathway. IPP is condensed to its allylic isomer, dimethylallyl diphosphate, to yield geranylgeranyl diphosphate, a common precursor for the production of cyclic diterpenoids. Studies of subcellular localization and of transgenic plants defective in the enzymes involved in the pathway have revealed that the synthesis processes of plastidic diterpenoids are metabolically separated in the plastids. Ditepenoid phytoalexins are synthesized through the plastidic MEP pathway in rice. The biosynthetic genes responsible for diterpenoid phytoalexins are clustered on the rice chromosomes, and the expression of them was coordinately regulated under stress conditions. Furthermore, a basic leucine zipper transcription factor, OsTGAP1, which is induced by the fungal chitin oligosaccharide elicitor, was identified as a key regulator of coordinated expression of the clustered biosynthetic genes for phytoalexin production in rice.