•Intensification leads to loss of tree diversity.•High tree diversity enhances coffee production, quality and reduces pest incidences.•Production losses could outcompete intensification benefits. Intensification of multispecies coffee agroforests reduces shade tree diversity with implications for tropical biodiversity. We investigated how tree biodiversity and its effects on coffee production and quality changes along a gradient of intensification (from diverse multispecies to Grevillea robusta dominated shade) across 25 Coffea canephora agroforests in Kodagu, India. Intensification causes a marked reduction in tree biodiversity (Shannon’s diversity: 2.74 to 0.29). Reduced tree diversity negatively affected both coffee production and quality (in terms of bean size), and increased incidences of pest attack, the coffee berry borer (Hypothenemus hampei). These results were consistent across a broad rainfall gradient (1060mmyr−1 to 4370mmyr−1) and management systems (conventional vs. organic farming and irrigation). Our results reveal important co-benefits of multispecies agroforestry systems for biodiversity conservation and coffee production. Nonetheless, intensification provides farmers with new livelihood options and income sources. To maintain high diversity agroforests, these opportunity costs need to be accounted for in developing realistic market strategies for biodiversity conservation.