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Specialized plant terpenoids have found fortuitous uses in medicine due to their evolutionary and biochemical selection for biological activity in animals. However, these highly functionalized natural products are produced through complex biosynthetic pathways for which we have a complete understanding in only a few cases. Here we review some of the most effective and promising plant terpenoids that are currently used in medicine and medical research and provide updates on their biosynthesis, natural occurrence, and mechanism of action in the body. This includes pharmacologically useful plastidic terpenoids such as <i>p</i>-menthane monoterpenoids, cannabinoids, paclitaxel (taxol^&#174;), and ingenol mebutate which are derived from the 2-<i>C</i>-methyl-<span style="font-variant: small-caps;">d</span>-erythritol-4-phosphate (MEP) pathway, as well as cytosolic terpenoids such as thapsigargin and artemisinin produced through the mevalonate (MVA) pathway. We further provide a review of the MEP and MVA precursor pathways which supply the carbon skeletons for the downstream transformations yielding these medically significant natural products.