Bacterial interactions with plants are accompanied by complex signal exchange processes. Previously, the nitrogen-fixing symbiotic (rhizo)bacterium Bradyrhizobium japonicum was found to carry adjacent genes encoding two sequentially acting diterpene cyclases that together transform geranylgeranyl diphosphate to ent-kaurene, the olefin precursor to the gibberellin plant hormones. Species from the three other major genera of rhizobia were found to have homologous terpene synthase genes. Cloning and functional characterization of a representative set of these enzymes confirmed the capacity of each genus to produce ent-kaurene. Moreover, comparison of their genomic context revealed that these diterpene synthases are found in a conserved operon which includes an adjacent isoprenyl diphosphate synthase, shown here to produce the geranylgeranyl diphosphate precursor, providing a critical link to central metabolism. In addition, the rest of the operon consists of enzymatic genes that presumably lead to a more elaborated diterpenoid, although the production of gibberellins was not observed. Nevertheless, it has previously been shown that the operon is selectively expressed during nodulation, and the scattered distribution of the operon via independent horizontal gene transfer within the symbiotic plasmid or genomic island shown here suggests that such diterpenoid production may modulate the interaction of these particular symbionts with their host plants.