Diatoms are among the most productive and ecologically important groups of microalgae in contemporary oceans. Due to their distinctive metabolic and physiological features, they offer exciting opportunities for a broad range of commercial and industrial applications. One such feature is their ability to synthesize a wide diversity of isoprenoid compounds. However, limited understanding of how these molecules are synthesized have until recently hindered their exploitation. Following comprehensive genomic and transcriptomic analysis of various diatom species, the biosynthetic mechanisms and regulation of the different branches of the pathway are now beginning to be elucidated. In this review, we provide a summary of the recent advances in understanding diatom isoprenoid synthesis and discuss the exploitation potential of diatoms as chassis for high-value isoprenoid synthesis.