To the best of my knowledge, only 19 cyclic and 8 linear C35 terpenes have been identified to date, and no family name was assigned to this terpene class until recently. In 2011, it was proposed that these C35 terpenes should be called sesquarterpenes. This review highlights the biosynthesis of two kinds of sesquarterpenes (C35 terpenes) that are produced via cyclization of a linear C35 isoprenoid in Bacillus and Mycobacterium species. In Bacillus species, a new type of terpene cyclase that has no sequence homology with any known terpene synthases, as well as a bifunctional terpene cyclase that biosynthesizes two classes of cyclic terpenes with different numbers of carbons as natural products, have been identified. On the other hand, in Mycobacterium species, the first bifunctional Z-prenyltransferase has been found, but a novel terpene cyclase and a unique polyprenyl reductase remain unidentified. The identification of novel enzyme types should lead to the discovery of many homologous enzymes and their products including novel natural compounds. On the other hand, many enzymes responsible for the biosynthesis of natural products have low substrate specificities in vitro. Therefore, to find novel natural products present in organisms, the multifunctionality of enzymes in the biosynthetic pathway of natural products should be analyzed.