Rhododendron dauricum produces daurichromenic acid, an anti-HIV meroterpenoid, via oxidative cyclization of the farnesyl group of grifolic acid. The prenyltransferase (PT) that synthesizes grifolic acid is a farnesyltransferase in plant specialized metabolism. In this study, we demonstrated that the isoprenoid moiety of grifolic acid is derived from the 2-C-methyl-d-erythritol-4-phosphate pathway that takes place in plastids. We explored candidate sequences of plastid-localized PT homologs and identified a cDNA for this PT, RdPT1, which shares moderate sequence similarity with known aromatic PTs. RdPT1 is expressed exclusively in the glandular scales, where daurichromenic acid accumulates. In addition, the gene product was targeted to plastids in plant cells. The recombinant RdPT1 regiospecifically synthesized grifolic acid from orsellinic acid and farnesyl diphosphate, demonstrating that RdPT1 is the farnesyltransferase involved in daurichromenic acid biosynthesis. This enzyme strictly preferred orsellinic acid as a prenyl acceptor, whereas it had a relaxed specificity for prenyl donor structures, also accepting geranyl and geranylgeranyl diphosphates with modest efficiency to synthesize prenyl chain analogs of grifolic acid. Such a broad specificity is a unique catalytic feature of RdPT1 that is not shared among secondary metabolic aromatic PTs in plants. We discuss the unusual substrate preference of RdPT1 using a molecular modeling approach. The biochemical properties as well as the localization of RdPT1 suggest that this enzyme produces meroterpenoids in glandular scales cooperatively with previously identified daurichromenic acid synthase, probably for chemical defense on the surface of R. dauricum plants.