background: Eukaryotic algae have recently emerged as hosts for metabolic engineering efforts to generate heterologous isoprenoids. Isoprenoid metabolic architectures, flux, subcellular localization, and transport dynamics have not yet been fully elucidated in algal hosts. results: In this study, we investigated the accessibility of different isoprenoid precursor pools for C sesquiterpenoid generation in the cytoplasm and chloroplast of Chlamydomonas reinhardtii using the Abies grandis bisabolene synthase (AgBS) as a reporter. The abundance of the C sesquiterpene precursor farnesyl pyrophosphate (FPP) was not increased in the cytosol by co-expression and fusion of AgBS with different FPP synthases (FPPSs), indicating limited C precursor availability in the cytoplasm. However, FPP was shown to be available in the plastid stroma, where bisabolene titers could be improved several-fold by FPPSs. Sesquiterpene production was greatest when AgBS-FPPS fusions were directed to the plastid and could further be improved by increasing the gene dosage. During scale-up cultivation with different carbon sources and light regimes, specific sesquiterpene productivities from the plastid were highest with CO as the only carbon source and light:dark illumination cycles. Potential prenyl unit transporters are proposed based on bioinformatic analyses, which may be in part responsible for our observations. conclusions: Our findings indicate that the algal chloroplast can be harnessed in addition to the cytosol to exploit the full potential of algae as green cell factories for non-native sesquiterpenoid generation. Identification of a prenyl transporter may be leveraged for further extending this capacity.