Abstract Context A key global challenge is to meet both the growing demand for food and feed while maintaining biodiversity’s supporting functions. Protected grasslands, such as Natura 2000 sites in Europe, may play an important role in harmonising productivity and biodiversity goals. This work contributes to an understanding of the relationship between forage production and plant diversity in protected and non-protected grasslands. Objectives We aimed to identify differences in plant diversity and forage production between protected and non-protected grasslands by assessing the effects of land-use intensity (i.e. mowing, grazing, fertilising) on these variables. Methods Data were available for 95 managed grassland plots (50 × 50 m) in real-managed landscapes. After controlling for site conditions in the analysis, we tested for significant differences between protected and non-protected grasslands and used a multi-group structural equation modelling (SEM) framework to investigate the linkages between land-use intensity, biomass and plant diversity. Results In protected grasslands, plant diversity was significantly higher while forage production was significantly lower. In non-protected grasslands we found significantly higher land-use intensity, particularly in relation to mowing and fertilisation. Grazing intensity did not significantly differ between protected and non-protected grasslands. In non-protected grasslands we found a significant negative association between forage production and plant diversity. However, this effect was not significant in protected grasslands. We also found a negative association between land-use and plant diversity in both grassland types that was related to mowing and fertilising intensity. These two management aspects also influenced the positive association between land-use intensity and forage production. Furthermore, environmental conditions had a positive effect on forage production and a negative effect on plant diversity in protected grasslands. Conclusions Our results confirm that the protection of grassland sites is successful in achieving higher plant diversity compared to non-protected grasslands and that protected grasslands do not necessarily trade-off with forage production. This is possible under moderate grazing intensities as higher land-use intensity has a negative effect on plant diversity, particularly on rare species. However, forage production is lower in protected sites as it is driven by mowing and fertilisation intensity. Future research needs to further investigate if the nature of these relationships depends on the livestock type or other management practices.