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<i>Selaginella moellendorffii</i> is a lycophyte, a member of an ancient vascular plant lineage. Two distinct types of terpene synthase (<i>TPS</i>) genes were identified from this species, including <i>S. moellendorffii TPS</i> genes (<i>SmTPSs</i>) and <i>S. moellendorffii</i> microbial <i>TPS-</i>like genes (<i>SmMTPSLs</i>). The goal of this study was to investigate the biochemical functions of SmMTPSLs. Here, eight full-length <i>SmMTPSL</i> genes (<i>SmMTPSL5, -15, -19, -23, -33, -37, -46,</i> and <i>-47)</i> were functionally characterized from <i>S. moellendorffii</i>. <i>Escherichia coli-</i>expressed recombinant SmMTPSLs were tested for monoterpenes synthase and sesquiterpenes synthase activities. These enzymatic products were typical monoterpenes and sesquiterpenes that have been previous shown to be generated by typical plant TPSs when provided with geranyl diphosphate (GPP) and farnesyl diphosphate (FPP) as the substrates. Meanwhile, <i>SmMTPSL23</i>, <i>-33</i>, and <i>-37</i> were up-regulated when induced by alamethicin (ALA) and methyl jasmonate (MeJA), suggesting a role for these genes in plants response to abiotic stresses. Furthermore, this study pointed out that the terpenoids products of SmMTPSL23, -33, and -37 have an antibacterial effect on <i>Pseudomonas syringae</i> pv. <i>tomato</i> DC3000 and <i>Staphylococcus aureus</i>. Taken together, these results provide more information about the catalytic and biochemical function of SmMTPSLs in <i>S. moellendorffii</i> plants.