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To counteract the negative effects of intensive agriculture there is increasing interest in approaches that reconcile agricultural production with the conservation and sustainable use of biodiversity and associated ecosystem services. Integration of functional agrobiodiversity (FAB) in agricultural systems holds promise to meet these challenging objectives, but requires the generation, transfer and implementation of tailor-made knowledge, and policy development. Currently various initiatives are undertaken across Europe to develop and assess the potential of biodiversity-based management practices by farmers, industry, researchers and governmental and non-governmental organizations. In this paper we show that the Convention on Biological Diversity and planned reforms in EU policy offer scope to further implement FAB concepts via legislation for biodiversity conservation, pesticide use, water quality, environmental protection and conservation of genetic resources. At the same time we observe that there are still impediments to the adoption of FAB approaches, including (i) translation of general knowledge to tailored, ready-to-use management practices, (ii) limited information on the effectiveness of FAB measures in terms of crop yield and quality, profitability, and reduction of agrochemical inputs, (iii) lack of appropriate financial accounting systems that allow fair accounting of the private investments and public benefits, and (iv) the implementation of FAB measures at the right spatial scales, which requires coordination among the various actors in a region. Current and new legislation may provide incentives to address these limitations and contribute to the further development and integration of FAB concepts in agricultural systems in Europe.