Veronicastrum sibiricum (L.) Pennell, a species within the Plantaginaceae family, has a history of traditional application in addressing conditions such as abdominal pain, common cold, sore throat, parotitis, rheumatic discomfort, and snakebite. The plant produces diverse bioactive constituents, including phenylpropanoids, essential oils, flavonoids, and terpenoids. Terpenoids, generated via terpene synthases (TPSs), are of particular interest due to their pharmacological properties. Nevertheless, TPS enzymes in V. sibiricum have not been thoroughly investigated. In this research, a transcriptomic strategy was employed to isolate and profile TPS genes from V. sibiricum. Sequencing of the transcriptome produced 107,929 unigenes, among which 42,976 were functionally annotated using public databases. KEGG pathway examination revealed 264 genes associated with terpenoid metabolism, including 12 putative VsTPS genes harboring characteristic TPS domains. From these, VsTPS1 was successfully cloned. Functional characterization established that VsTPS1 operates as a bifunctional enzyme: in vitro, it catalyzes the conversion of FPP to (E)-nerolidol and, to a lesser extent, GPP to linalool. When expressed transiently in Nicotiana benthamiana, however, only (E)-nerolidol was detected, supporting its cytosolic localization and substrate specificity toward FPP. Accordingly, this sesquiterpene synthase was redesignated VsNES1. Co-expression of VsNES1 with HMGR in N. benthamiana markedly increased (E)-nerolidol yields, illustrating an effective strategy for heterologous production. These findings deepen our understanding of the TPS family in medicinal plant V. sibiricum and enable future biotechnological exploitation of terpenoid production in heterogenous plant cells.