Rice plants fed on by fall armyworm (Spodoptera frugiperda, FAW) caterpillars emit a blend of volatiles dominated by terpenoids. These volatiles were highly attractive to females of the parasitoid Cotesia marginiventris. Microarray analysis identified 196 rice genes whose expression was significantly upregulated by FAW feeding, 18 of which encode metabolic enzymes potentially involved in volatile biosynthesis. Significant induction of expression of seven of the 11 terpene synthase (TPS) genes identified through the microarray experiments was confirmd using real-time RT-PCR. Enzymes encoded by three TPS genes, Os02g02930, Os08g07100 and Os08g04500, were biochemically characterized. Os02g02930 was found to encode a monoterpene synthase producing the single product S-linalool, which is the most abundant volatile emitted from FAW-damaged rice plants. Both Os08g07100 and Os08g04500 were found to encode sesquiterpene synthases, each producing multiple products. These three enzymes are responsible for production of the majority of the terpenes released from FAW-damaged rice plants. In addition to TPS genes, several key genes in the upstream terpenoid pathways were also found to be upregulated by FAW feeding. This paper provides a comprehensive analysis of FAW-induced volatiles and the corresponding volatile biosynthetic genes potentially involved in indirect defense in rice. Evolution of the genetic basis governing volatile terpenoid biosynthesis for indirect defense is discussed.