The relationship between biodiversity and ecosystem functioning has emerged as a central issue in ecological and environmental sciences during the last decade. Increasing domination of ecosystems by humans is steadily transforming them into depauperate systems. Because ecosystems collectively determine the biogeochemical processes that regulate the earth system, the potential ecological consequences of biodiversity loss have aroused considerable interest. Recent experimental and theoretical work in this area has led to animated debates and controversies. These controversies are currently in the process of being resolved thanks to conceptual and theoretical advances. We now know that the productivity and nutrient retention ability of grassland ecosystems are affected by both local complementarity between species with different ecological niches and ecological "selection" of species with particular traits. A moderate number of key complementarity species are probably critical to explain the level of primary production observed in grassland ecosystems at the small spatial and temporal scales considered in recent experiments. These experiments, however, are very likely to underestimate the true extent of the impacts of biodiversity loss on ecosystem functioning. First, there is theoretical and experimental evidence that the diversity of functionally similar species can also buffer ecosystem processes against environmental fluctuations and enhance their long-term average magnitude. Second, heterogeneous environments are best used by an array of species with different specialisations, and habitat destruction and fragmentation may prevent appropriate dominant species from being recruited in each community. The larger the temporal and spatial scales considered, the higher the diversity that is likely to be needed to maintain particular ecosystem processes. The traditional approach in community ecology has considered species diversity as a dependent variable controlled by abiotic conditions and ecosystem-level constraints. The traditional approach in ecosystem ecology has primarily focused on dominant species as biotic controllers of ecosystem processes. Recent approaches have broadened the perspectives of both subdisciplines by assessing the role of biodiversity as a potential modulator of processes. In reality there are mutual interactions among biodiversity changes, ecosystem functioning and abiotic factors. Integrating these interactions into a single, unified picture, both theoretically and experimentally, and across ecosystem types and processes, is a major challenge which may help bring about a true synthesis of community and ecosystem ecology.