An ongoing decrease in habitat and species diversity is occurring in many areas across Europe, including in grasslands in mountain areas, calling for adapted biodiversity management and measures. In this context, we carried out 79 interviews with grassland farmers in five alpine mountain regions in Germany, France, Austria, Italy, and Switzerland. We analyzed farmers’ perceptions about the functions and services of their grasslands, how they qualify “good” grasslands, which grassland management practices have changed over the last 10 years, and proposals to increase species diversity on the farm. They related them primarily to cultural ecosystem services, secondly to provisioning services, and thirdly to regulating and supporting services. Good pastures or meadows were mostly related to composition, quality of forage and productivity, structural criteria, and certain characteristics of soils and topography. The measures for increasing biodiversity that were most frequently proposed were upgrading of forest edges, planting hedges or fruit trees, less or late grassland cutting, reduction or omission of fertilization, and more general extensification of farm productions. Factors hindering the implementation of these measures were mainly increased workload, insufficient time, and a lack of financial means or support to cover additional costs for biodiversity management. These factors have to be taken specifically into account for future policies for enhanced biodiversity management of grasslands, also beyond mountainous areas. Overall, we found that farmers have good but varying knowledge about biodiversity management of their grasslands, but also different perspectives on how to improve it. Here, local initiatives that bring together farmers and flora or fauna specialists to exchange knowledge could be designed and used in participatory pilot schemes to enhance the implementation of improved biodiversity management.