This paper addresses the relationship between agro-biodiversity conservation and sustainable agricultural intensification. It shows that in biodiversity poor agroecosystems both agro-biodiversity and conventional input intensification may increase through optimal adjustments of input use. Increase in agro-biodiversity conservation is a necessary condition for optimal adjustment to equilibrium but whether input use will increase or decrease along this optimal path depends on the buffering effect of agro-biodiversity on ecosystem damage and the relative welfare impacts of output reductions and ecosystem damage. The model points out that ecosystem damage (through agro-biodiversity loss) can decline even under increased agricultural intensification.