The novel diterpenoid taxol (paclitaxel) is now well-established as a potent chemotherapeutic agent. Total synthesis of the drug is not commercially feasible and, in the foreseeable future, the supply of taxol and its synthetically useful progenitors must rely on biological methods of production. The first three steps of taxol biosynthesis have been defined and the responsible enzymes described. These are the cyclization of the universal diterpenoid precursor geranylgeranyl diphosphate to taxa-4(5),11(12)-diene, the cytochrome P450-catalyzed hydroxylation of this olefin to taxa-4(20),11(12)-dien-5α-ol, and the acetyl CoA-dependent conversion of the alcohol to the corresponding acetate ester. Demonstration of these early steps of taxol biosynthesis suggests that the complete pathway can be defined by a systematic, stepwise approach at the cell-free enzyme level. When combined with in vivo studies to determine contribution to pathway flux, slow steps can be targeted for gene isolation and subsequent overexpression in Taxus to improve the yield of taxol and related compounds.