The livestock agriculture of temperate grasslands is a major provider of meat and milk to the world. These areas also deliver important ecosystem services and are central to tourism, amenity, and leisure in many countries. However, they are also major sources of pollution of waterways and of greenhouse gas emissions. In this review, we focus on how the genetic improvement of some of the major crop species of temperate grasslands can contribute to reduced environmental impacts and climate change mitigation including the enhancement of carbon sequestration. The main species considered are the ryegrasses and fescues and the clovers. With regard to diffuse pollution of waterways, increasing the efficiency with which the plant utilizes nitrogen and phosphorus has significant potential to reduce the amounts available for leaching and overland flow. This also allows reduced fertilizer use, in itself representing a significant saving of greenhouse gas emissions. Changes in the composition of the plant diet have the potential to increase the efficiency of nitrogen use in the rumen and reduce the amount of methane produced by enteric fermentation. Carbon sequestration in temperate grasslands may potentially be enhanced by understanding and altering root architecture and turn over and also litter composition. The role of forage breeding in improving soil quality and flood defense is also considered and wider aspects of the role of persistent perennial species discussed. To fully realize the potential of genetic improvement, breeding programs need to incorporate state-of-the-art genomics and also to be guided by modeling studies. An integrated approach combining the skills of animal scientists, soil scientists, and plant breeders within the context of life cycle analysis is required to find sustainable solutions to the challenge of maintaining the productivity of livestock agriculture while reducing its environmental footprint.