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Eukaryotic green microalgae show considerable promise for the sustainable light-driven biosynthesis of high-value fine chemicals, especially terpenoids because of their fast and inexpensive phototrophic growth. Here, the novel isopentenol utilization pathway (IUP) was introduced into <i>Chlamydomonas reinhardtii</i> to enhance the hemiterpene (isopentenyl pyrophosphate, IPP) titers. Then, diphosphate isomerase (IDI) and limonene synthase (MsLS) were further inserted for limonene production. Transgenic algae showed 8.6-fold increase in IPP compared with the wild type, and 23-fold increase in limonene production compared with a single <i>MsLS</i> expressing strain. Following the culture optimization, the highest limonene production reached 117 µg/L, when the strain was cultured in a opt2 medium supplemented with 10 mM isoprenol under a light: dark regimen. This demonstrates that transgenic algae expressing the IUP represent an ideal chassis for the high-value terpenoid production. The IUP will facilitate further the metabolic and enzyme engineering to enhance the terpenoid titers by significantly reducing the number of enzyme steps required for an optimal biosynthesis.