The functioning and sustainability of ecosystems may depend on their biological diversity. Elton's hypothesis that more diverse ecosystems are more stable has received much attention, but Darwin's proposal that more diverse plant communities are more productive, and the related conjectures that they have lower nutrient losses and more sustainable soils, are less well studied. Here we use a well-replicated field experiment, in which species diversity was directly controlled, to show that ecosystem productivity in 147 grassland plots increased significantly with plant biodiversity. Moreover, the main limiting nutrient, soil mineral nitrogen, was utilized more completely when there was a greater diversity of species, leading to lower leaching loss of nitrogen from these ecosystems. Similarly, in nearby native grassland, plant productivity and soil nitrogen utilization increased with increasing plant species richness. This supports the diversity-productivity and diversity-sustainability hypotheses. Our results demonstrate that the loss of species threatens ecosystem functioning and sustainability.