Milk and beef derived from pasture-based systems have been characterized by higher nutritional values and a lower environmental footprint than their equivalents obtained via indoor systems. However, intensification of pasture-based production can have adverse impacts on biodiversity and the environment. To date, studies on pro-environmental diversification options leading to improvement of environmental performance of pasture-based dairy and beef production have rarely been synthesized. The present study sought to review current on-farm pro-environmental measures with the potential for enhancing biodiversity status and/or reducing the environmental impacts of pasture-based agriculture. Literature on farmer attitudes toward these measures was also reviewed to identify potential obstacles and opportunities for transitioning to pro-environmental agriculture. A systematic search of published research from high-income island countries characterized by oceanic temperate climate with a high dependence on pasture-based agriculture—the Republic of Ireland, the United Kingdom and New Zealand, was conducted. Thirty studies that assessed the impact of pro-environmental measures, eight ‘attitudinal’ studies of dairy and beef farmers and one study covering both aspects were identified. Inductive thematical analysis was subsequently undertaken. Environmentally sensitive management practices such as hedgerows and field margins management, mixed grazing (where two or more herbivorous animals graze the same land), rare livestock breeds, multispecies swards, organic farming and agroforestry were identified as primary themes studied under the auspices of pro-environmental diversification, while forestry, bioenergy crops and organic farming were the main themes identified within attitudinal research studies. Findings suggest that environmentally sensitive practices have varied effects on biodiversity. Mixed grazing was found to improve livestock production, while studies of organic farming reported multiple positive impacts on biodiversity and animal welfare. Effect of multispecies swards on methane emissions and urinary nitrogen extraction were found to be inconsistent. Attitudinal research suggests that the main barrier to implementing afforestation is its lack of attractiveness compared to ‘traditional’ farming and that organic farmer decisions regarding agricultural management practices might be less profit-oriented and influenced by ecological beliefs to a greater extent than decisions of conventional farmers. The results of this study confirm that pro-environmental diversification inherently encompasses multiple scientific disciplines; however, previous study designs and outcomes were found to be fragmented and narrowly focused. Considering the urgency and importance of climate and biodiversity crises, pro-environmental diversification of pasture-based dairy and beef production has rarely been holistically approached and remains understudied. The development of practical, sustainable solutions for farming based on circular economy and respect to nature and additional strategies to increase farmer and consumer environmental awareness should be prioritized by policymakers, advisory and scientific bodies.