Species-rich grasslands are familiar to us. They are perhaps so familiar in our cultural landscapes of Europe that we no longer really take them in for what they are and what they do. Not many people know, for example, that species-rich grasslands (whether natural or semi-natural) have the highest plant diversity on a small scale of any habitat on earth. This fact invites us to take a close look at these important habitats. What functions do species-rich grasslands perform in relation to productivity, nutrient cycling, carbon storage and climate mitigation? The high diversity of plant species provides a wide range of different interaction possibilities with other organisms, such as insects, other animals, fungi and bacteria. We know that with more species with a range of different traits in a grassland, the system works better, with higher productivity, more efficient nutrient cycles and the presence of more non-plant species in the ecosystem. The better functioning system with a wide range of plant functional traits allows for better provision of ecosystem services such as carbon sequestration, erosion control, hay production as high quality animal feed, and the attraction of enemies of plant pests. Grasslands have been shown to be surprisingly resistant and resilient in the face of extreme weather events associated with climate change, and yet they are very sensitive to land use change and addition of excess nitrogen. They have huge potential as climate mitigators, since they can store a lot of carbon and have high albedo. Restoration of degraded land into species-rich grasslands is relatively easy and would provide a combined boost of biodiversity and climate mitigation, including in urban environments.