Isoprenoids are synthesized from the precursors isopentenyl diphosphate (IPP) and dimethylallyl diphosphosphate (DMAPP), which are interconverted by the enzyme isopentenyl diphosphate isomerase (IPPI). Many plants express multiple isoforms of IPPI, the only enzyme shared by the mevalonate (MVA) and non-mevalonate (MEP) pathways, but little is known about their specific roles. In rice (Oryza sativa), which has two IPPI paralogs (OsIPPI1 and OsIPPI2), we therefore carried out a comprehensive comparison of IPPI gene expression and protein localization. We found that OsIPPI1 mRNA was more abundant than OsIPPI2 mRNA in all rice tissues, and its expression in de-etiolated leaves mirrored the accumulation of phytosterols, suggesting a key role in the synthesis of MVA pathway isoprenoids. We investigated the subcellular localization of both isoforms by constitutively expressing them as fusions with synthetic green fluorescent protein and detecting them by confocal fluorescence microscopy and immuno-electron microscopy. Both proteins localized to the endoplasmic reticulum (ER) as well as peroxisomes and mitochondria, whereas only OsIPPI2 was detected in plastids, reflecting the presence of an N-terminal transit peptide which is not present in OsIPPI1. Despite the plastidial location of OsIPPI2, the expression of OsIPPI2 mRNA did not mirror the accumulation of chlorophylls or carotenoids, indicating that OsIPPI2 is a dispensable component of the MEP pathway. The detection of both isoforms in the ER indicates that DMAPP can be synthesized de novo in this compartment, providing insight into the role of the ER in synthesis of MVA-derived isoprenoids.