Milk cap mushrooms in the genus Lactarius are known to produce a wide variety of terpene natural products. However, their repertoire of terpene biosynthetic enzymes has not been fully explored. In this study, several candidate sesquiterpene synthases were identified from the genome of the saffron milk cap mushroom L. deliciosus and expressed in a sesquiterpene-overproducing Escherichia coli strain. In addition to enzymes that produce several known terpenes, we identified an enzyme belonging to a previously unknown clade of sesquiterpene synthases that produces a terpene with a unique spiro-tricyclic scaffold. These findings add to the rich diversity of terpene scaffolds and mushroom terpene synthases and are valuable for biotechnological applications in producing these terpenoids.