Grasslands are one of the most important ecosystems on Earth, covering approximately one-third of the Earth’s surface. Grassland biodiversity is important as many services provided by such ecosystems are crucial for the human economy and well-being. Given the importance of grasslands ecosystems, in recent years research has been carried out on the potential to monitor them with novel remote sensing techniques. Improved detectors technology and novel sensors providing fine-scale hyperspectral imagery have been enabling new methods to monitor plant traits (PTs) and biodiversity. The aims of the work were to study different approaches to monitor key grassland PTs such as Leaf Area Index (LAI) and biodiversity-related traits. The thesis consists of 3 parts: 1) Evaluating the performance of remote sensing methods to estimate LAI in grassland ecosystems, 2) Estimating plant biodiversity by using the optical diversity approach in grassland ecosystems, and 3) Investigating the relationship between PTs variability with alpha and beta diversity for the applicability of the optical diversity approach in a subalpine grassland of the Italian Alps To evaluate the performance of remote sensing methods to estimate LAI, temporal and spatial observations of hyperspectral reflectance and LAI were analyzed at a grassland site in Monte Bondone, Italy (IT-MBo). In 2018, ground temporal observations of hyperspectral reflectance and LAI were carried out at a grassland site in Neustift, Austria (AT-NEU). To estimate biodiversity, in 2018 and 2019 a floristics survey was conducted to determine species composition and hyperspectral data were acquired at two grassland sites: IT-MBo and University of Padova’s Experimental Farm, Legnaro, Padua, Italy (IT-PD) respectively. Furthermore, in 2018, biochemistry analysis of the biomass samples collected from the grassland site IT-MBo was carried out to determine the foliar biochemical PTs variability. The results of the thesis demonstrated that the grassland spectral response across different spectral regions (Visible: VIS, red-edge: RE, Near-infrared: NIR) showed to be both site-specific and scale-dependent. In the first part of the thesis, the performance of spectral vegetation indices (SVIs) based on visible, red-edge (RE), and NIR bands alongside SVIs solely based or NIR-shoulder bands (wavelengths 750 - 900 nm) was evaluated. A strong correlation (R2 > 0.8) was observed between grassland LAI and both RE and NIR-shoulder SVIs on a temporal basis, but not on a spatial basis. Using the PROSAIL Radiative Transfer Model (RTM), it was demonstrated that grassland structural heterogeneity strongly affects the ability to retrieve LAI, with high uncertainties due to structural and biochemical PTs co-variation. In the second part, the applicability of the spectral variability hypothesis (SVH) was questioned and highlighted the challenges to use high-resolution hyperspectral images to estimate biodiversity in complex grassland ecosystems. It was reported that the relationship between biodiversity (Shannon, Richness, Simpson, and Evenness) and optical diversity metrics (Coefficient of variation (CV) and Standard deviation (SD)) is not consistent across plant communities. The results of the second part suggested that biodiversity in terms of species richness could be estimated by optical diversity metrics with an R2 = 0.4 at the IT-PD site where the grassland plots were artificially established and are showing a lower structure and complexity from the natural grassland plant communities. On the other hand, in the natural ecosystems at IT-MBo, it was more difficult to estimate biodiversity indices, probably due to structural and biochemical PTs co-variation. The effects of canopy non-vegetative elements (flowers and dead material), shadow pixels, and overexposed pixels on the relationship between optical diversity metrics and biodiversity indices were highlighted. In the third part, we examined the relationship between PTs variability (at both local and community scales, measured by standard deviation and by the Euclidean distances of the biochemical and biophysical PTs respectively) and taxonomic diversity (both α-diversity and β-diversity, measured by Shannon’s index and by Jaccard dissimilarity index of the species, families, and functional groups percent cover respectively) in Monte Bondone, Trentino province, Italy. The results of the study showed that the PTs variability metrics at alpha scale were not correlated with α-diversity. However, the results at the community scale (β-diversity) showed that some of the investigated biochemical and biophysical PTs variations metrics were associated with β-diversity. The SVH approach was also tested to estimate β-diversity and we found that spectral diversity calculated by spectral angular mapper (SAM) showed to be a better proxy of biodiversity in the same ecosystem where the spectral diversity failed to estimate alpha diversity, this leading to the conclusion that the link between functional and species diversity may be an indicator of the applicability of optical sampling methods to estimate biodiversity. The findings of the thesis highlighted that grassland structural heterogeneity strongly affects the ability to retrieve both LAI and biodiversity, with high uncertainties due to structural and biochemical PTs co-variation at complex grassland ecosystems. In this context, the uncertainties of satellite-based products (e.g., LAI) in monitoring grassland canopies characterized by either spatially or temporally varying structure need to be carefully taken into account. The results of the study highlighted that the poor performance of optical diversity proxies in estimating biodiversity in structurally heterogeneous grasslands might be due to the complex relationships between functional diversity and biodiversity, rather than the impossibility to detect functional diversity with spectral proxies.