Terpenes are the most widely distributed chemical compounds in the perfume industry and most of the fragrant compounds are terpenes exact ly. This paper discusses all that is needed to know about terpenes or compounds derived from them, that are used in perfumes and products for everyday use with added perfumes in order to improve their odor. The introduction describes the role of terpenes in plants, physical and chemical properties of terpenes and their use in products we use every day, of which the most important are perfumes and products containing them. Terpenes occur in nature and their biosynthesis and methods of isolation from natural sources are explained. As the isolation of natural perfume ingredients is often complicated and economically inefficient, there was a need for their synthesis. Due to the successful synthesis of terpenes and other aromatic chemicals, perfumes have become widely available. In this paper is particular emphasis on terpenes, as well as the chemical compounds derived from them, which are important for the perfume industry. There are listed key terpenes, raw materials from which they are derived and the most important chemical reactions which lead to the final products. Terpenes are divided into main groups, there are listed the most important representatives of each group and the chemical reactions from which they are derived. At the end of the paper there is review about the impact of perfume ingredients, including terpenes, on human health.