This paper considers the significance of biological diversity in relation to large‐scale processes in complex and dynamic ecological‐economic systems. It focuses on functional diversity, and its relation to production and maintenance of ecological services that underpin human societies. Within functional groups of organisms two important categories of species are identified: keystone process species and those essential for ecosystem resilience. The latter group represents natural insurance capital. In addition to basic research on the interplay among biological diversity, functional performance, and resilience in complex self‐organizing systems, we suggest that a functional approach has two main implications for a strategy for biodiversity conservation: (1) Biodiversity conservation to assure the resilience of ecosystems is required for all systems, no matter how heavily impacted they are. It should not be limited to protected areas. (2) The social, cultural, and economic driving forces in society that cause biodiversity loss need to be addressed directly. Specifically, (a) differences between the value of biological diversity to the private individual and its fundamental value to society as a whole need to be removed; (b) social and economic policies that encourage biodiversity loss should be reformed, especially where there is a risk of irreversible damage to ecosystems and diversity; and (c) institutions that are adaptive and work in synergy with ecosystem processes and functions are critical and should be created at all levels.