Diversification of grassland-based systems is highly valued in agroecology, organic farming and other forms of regenerative agriculture. For lowlands, mountain and Mediterranean areas, we illustrate that diversification of grassland types, livestock species, products and farm labour allows coping with market, climatic and workforce-related risks. However, diversification is not a one-size-fits-all strategy and the type of diversification strategy should be adapted according to socio-economic, structural, technical and pedoclimatic conditions of each farm. Farmers' technical skills and ability to re-organise and monitor the system must be considered to avoid ineffectiveness of the diversified system. Moreover, it is essential to account for site-specific conditions so that the ecological processes to be optimised can provide the expected benefits. Diversification occurs on different levels, from grassland management to the entire farm activity. There may be trade-offs among these different levels impairing grassland ecosystem services. For instance, if diversification of farm activities dilutes the workforce, simplified grassland management can lead to the loss of vegetation communities of high ecological value. In contrast, case-adapted diversification benefits from local opportunities, available resources and external supports to secure the system and favour sustainable resource management. Diversification thereby preserves grassland ecosystem services and enhances farm socio-economic resilience to withstand perturbations.