Terpenoids are a large class of natural secondary plant metabolites which are highly diverse in structure, formed from isoprene units (C-5), associated with a wide range of biological properties, including antioxidant, antimicrobial, anti-inflammatory, antiallergic, anticancer, antimetastatic, antiangiogenesis, and apoptosis induction, and are considered for potential application in the food, cosmetics, pharmaceutical, and medical industries. In plants, terpenoids exert a variety of basic functions in growth and development. This review gives an overview, highlighting the current knowledge of terpenoids and recent advances in our understanding of the organization, regulation, and diversification of core and specialized terpenoid metabolic pathways and addressing the most important functions of volatile and non-volatile specialized terpenoid metabolites in plants. A comprehensive description of different aspects of plant-derived terpenoids as a sustainable source of bioactive compounds, their biosynthetic pathway, the several biological properties attributed to these secondary metabolites associated with health-promoting effects, and their potential industrial applications in several fields will be provided, and emerging and green extraction methods will also be discussed. In addition, future research perspectives within this framework will be highlighted. Literature selection was carried out using the National Library of Medicine, PubMed, and international reference data for the period from 2010 to 2024 using the keyword "terpenoids". A total of 177,633 published papers were found, of which 196 original and review papers were included in this review according to the criteria of their scientific reliability, their completeness, and their relevance to the theme considered.