Traditional bioproduct engineering focuses on pathway optimization, yet is often complicated by product inhibition, downstream consumption, and the toxicity of certain products. Here, we present the co-compartmentation of biosynthesis and storage via a synthetic droplet as an effective new strategy to improve the bioproduct yield, with squalene as a model compound. A hydrophobic protein was designed and introduced into the tobacco chloroplast to generate a synthetic droplet for terpene storage. Simultaneously, squalene biosynthesis enzymes were introduced to chloroplasts together with the droplet-forming protein to co-compartmentalize the biosynthesis and storage of squalene. The strategy has enabled a record yield of squalene at 2.6 mg/g fresh weight without compromising plant growth. Confocal fluorescent microscopy imaging, stimulated Raman scattering microscopy, and droplet composition analysis confirmed the formation of synthetic storage droplet in chloroplast. The co-compartmentation of synthetic storage droplet with a targeted metabolic pathway engineering represents a new strategy for enhancing bioproduct yield.