The saikosaponins comprise oleanane- and ursane-type triterpene saponins that are abundantly present in the roots of the genus Bupleurum widely used in Asian traditional medicine. Here we identified a gene, designated CYP716Y1, encoding a cytochrome P450 monooxygenase from Bupleurum falcatum that catalyzes the C-16α hydroxylation of oleanane- and ursane-type triterpenes. Exploiting this hitherto unavailable enzymatic activity, we launched a combinatorial synthetic biology program in which we combined CYP716Y1 with oxidosqualene cyclase, P450, and glycosyltransferase genes available from other plant species and reconstituted the synthesis of monoglycosylated saponins in yeast. Additionally, we established a culturing strategy in which applying methylated β-cyclodextrin to the culture medium allows the sequestration of heterologous nonvolatile hydrophobic terpenes, such as triterpene sapogenins, from engineered yeast cells into the growth medium, thereby greatly enhancing productivity. Together, our findings provide a sound base for the development of a synthetic biology platform for the production of bioactive triterpene sapo(ge)nins.