Parageobacillus thermoglucosidasius is a genetically tractable thermophile that grows rapidly at elevated temperatures, with a doubling time at 65 °C comparable to the shortest doubling times of Escherichia coli. It is capable of using a wide variety of substrates, including carbohydrate oligomers, and has been developed for the industrial production of ethanol. In this study, P. thermoglucosidasius NCIMB11955 has been engineered to produce the sesquiterpene τ-muurolol by introduction of a heterologous mevalonate pathway constructed using genes from several thermophilic archaea together with a recently characterised thermostable τ-muurolol synthase. P. thermoglucosidasius naturally uses the methylerythritol phosphate pathway for production of the terpene precursor, isopentenyl pyrophosphate, while archaea use a version of the mevalonate pathway. By introducing the orthogonal archaeal pathway it was possible to increase the flux through to sesquiterpene biosynthesis. Construction of such a large metabolic pathway created problems with genetic vector introduction and stability, so recombinant plasmids were introduced by conjugation, and a thermostable serine integrase system was developed for integration of large pathways onto the chromosome. Finally, by making the heterologous pathway maltose-inducible we demonstrate that the new strain is capable of using waste bread directly as an autoinduction carbon source for the production of terpenes in a consolidated bioprocess.