Terpene cyclization is orchestrated by terpene cyclases, which are involved in the biosynthesis of various cyclic natural products, but understanding the origin and mechanism of the selectivity of terpene cyclization is challenging. In this work, we describe an in-depth mechanistic study on cyclooctatin biosynthesis by means of theoretical calculations combined with experimental methods. We show that the main framework of cyclooctatin is formed through domino-type carbocation transportation along the terpene chain, which we call a "cation-stitching cascade", including multiple hydrogen-shifts and a ring rearrangement that elegantly determine the stereoselectivity.