Colletotrichum acutatum is a major fungal pathogen of fruit crops, which causes severe yield losses in strawberry production. A potential key factor in plant–pathogen interactions is fungal sesquiterpenoids which have mycotoxic and phytotoxic activities. The first committed step in sesquiterpenoid biosynthesis is performed by sesquiterpene synthases (TPS). Only a few TPSs have been functionally characterized from filamentous fungi and none from the genus Colletotrichum. Despite being an important fungal pathogen to agriculture, it is poorly understood at the molecular and chemical levels. The terpenoid biochemistry in Coll. acutatum strain SA 0-1 was studied and one Coll. acutatum TPS (CaTPS) was successfully cloned and characterized in yeast. CaTPS catalyses the biosynthesis of multiple sesquiterpenoids. The two major products are b-caryophyllene and an unidentified sesquiterpenoid along with a-humulene as one of the minor sesquiterpenoid products. These products were also secreted by the fungus in strawberry fruit medium along with several other sesquiterpenoids indicating other TPSs are active during in vitro growth. b-Caryophyllene and a-humulene are known cytotoxic products important for ecological interactions and are produced by SA 0-1. Interestingly, a gene expression analysis using quantitative real-time PCR revealed a significant increase in expression of CaTPS during strawberry fruit infection, thus indicating that it could be involved in fruit infection. This is, we believe, the first characterization of TPS in Colletotrichum spp. and terpenoid profiles of Coll. acutatum, which could facilitate studies on the role of terpenoids in the ecology of Coll. acutatum.