Terpene cyclases catalyze the synthesis of cyclic terpenes with 10-, 15- , and 20-carbon acyclic isoprenoid diphosphates as substrates. Plants have been a source of these natural products by providing a homologous set of terpene synthases. The crystal structures of 5-epi-aristolochene synthase, a sesquiterpene cyclase from tobacco, alone and complexed separately with two farnesyl diphosphate analogs were analyzed. These structures reveal an unexpected enzymatic mechanism for the synthesis of the bicyclic product, 5- epi-aristolochene, and provide a basis for understanding the stereochemical selectivity displayed by other cyclases in the biosynthesis of pharmacologically important cyclic terpenes. As such, these structures provide templates for the engineering of novel terpene cyclases.