Covering about 40% of Earth’s land surface and sustaining at least 38% of global population, drylands are key crop and animal production regions with high economic and social values. However, land use changes associated with industrialized agricultural managements are threatening the sustainability of these systems. While previous studies assessing the impacts of agricultural management systems on biodiversity and their services focused on more diversified mesic landscapes, there is a dearth of such research in highly simplified dryland agroecosystems. In this paper, we 1) summarize previous research on the effects of farm management systems and agricultural expansion on biodiversity and biodiversity-based ecosystem services, 2) present four case studies assessing the impacts of management systems on biodiversity and ecosystem services across highly simplified dryland landscapes of the Northern Great Plains (NGP), USA, 3) discuss approaches to sustain biodiversity-based ecosystem services in drylands, and 4) present a conceptual framework for enhancing agricultural sustainability in the drylands through research, policy, economic valuation, and adaptive management. An analysis of the land use changes due to agricultural expansion within the Golden Triangle, a representative agricultural area in the NGP, indicated that the proportion of land conversion to agriculture area was 84%, 8%, and 7% from grassland, riparian, and shrubland habitats, respectively. Our results showed this simplification was associated with a potential reduction of pollination services. Also, our economic analysis projected that if 30% parasitism could be achieved through better management systems, the estimated potential economic returns to pest regulation services through parasitoids in Montana, USA alone could reach about $11.23 million. Overall, while dryland agroecosystems showed a significant loss of native biodiversity and its services, greater pest incidence, and a decrease in plant pollinator networks, these trends were moderately reversed in organically managed farming systems. In conclusion, although land use changes due to agricultural expansion and industrialized farming threaten the sustainability of dryland agroecosystems, this impact can be partially offset by coupling ecologically-based farming practices with adaptive management strategies.