Flowers of the kiwifruit species Actinidia chinensis produce a mixture of sesquiterpenes derived from farnesyl diphosphate (FDP) and monoterpenes derived from geranyl diphosphate (GDP). The tertiary sesquiterpene alcohol (E)-nerolidol was the major emitted volatile detected by headspace analysis. Contrastingly, in solvent extracts of the flowers, unusually high amounts of (E,E)-farnesol were observed, as well as lesser amounts of (E)-nerolidol, various farnesol and farnesal isomers, and linalool. Using a genomics-based approach, a single gene (AcNES1) was identified in an A. chinensis expressed sequence tag library that had significant homology to known floral terpene synthase enzymes. In vitro characterization of recombinant AcNES1 revealed it was an enzyme that could catalyse the conversion of FDP and GDP to the respective (E)-nerolidol and linalool terpene alcohols. Enantiomeric analysis of both AcNES1 products in vitro and floral terpenes in planta showed that (S)-(E)-nerolidol was the predominant enantiomer. Real-time PCR analysis indicated peak expression of AcNES1 correlated with peak (E)-nerolidol, but not linalool accumulation in flowers. This result, together with subcellular protein localization to the cytoplasm, indicated that AcNES1 was acting as a (S)-(E)-nerolidol synthase in A. chinensis flowers. The synthesis of high (E,E)-farnesol levels appears to compete for the available pool of FDP utilized by AcNES1 for sesquiterpene biosynthesis and hence strongly influences the accumulation and emission of (E)-nerolidol in A. chinensis flowers.