Abstract Terpene cyclization reactions are fascinating owing to the precise control of connectivity and stereochemistry during the catalytic process. Cyclooctat‐9‐en‐7‐ol synthase (CotB2) synthesizes an unusual 5‐8‐5 fused‐ring structure with six chiral centers from the universal diterpene precursor, the achiral C 20 geranylgeranyl diphosphate substrate. An unusual new mechanism for the exquisite CotB2‐catalyzed cyclization that involves a carbon–carbon backbone rearrangement and three long‐range hydride shifts is proposed, based on a powerful combination of in vivo studies using uniformly 13 C‐labeled glucose and in vitro reactions of regiospecifically deuterium‐substituted geranylgeranyl diphosphate substrates. This study shows that CotB2 elegantly demonstrates the synthetic virtuosity and stereochemical control that evolution has conferred on terpene synthases.