Switzerland is predominantly a grassland country and, therefore, provides a particularly suitable model for examining sustainability measures at the grassland–livestock nexus. The present work synthesizes scientific evidence to critically assess the sustainability of livestock production systems that integrate grasslands and locally available resources in both ruminant and monogastric species. Site-adapted livestock systems are a long-term strategy for producing high-quality food while delivering other key ecosystem services such as biodiversity conservation, carbon sequestration, and landscape preservation. These systems also maximize resource use efficiency, reduce food–feed competition, improve animal health and welfare, and enhance positive externalities. Ensuring multifunctionality requires balancing productivity with environmental performance amid the pressures of climate change, labor shortages, and structural transformation in agriculture. Adaptive pastoral management, the integration of woody forage species, and targeted agricultural policies are essential for reducing emissions and nutrient losses, enhancing circularity within agroecosystems, and achieving the Farm to Fork Strategy objectives under the European Green Deal. Permanent but also temporary grasslands play significant roles, improving soil health, nutrient cycling, and carbon storage, increasing resilience, reducing chemical inputs, and benefiting subsequent crops. Collaboration among researchers, farmers, policymakers, and society is crucial to design adaptive, socially accepted livestock systems that align with the European Green Deal target of carbon neutrality by 2050, ensuring food security, quality, affordability, and sustainable livelihoods.