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Cultural landscapes, shaped by centuries of traditional low-intensity agricultural practices, have been declining all over the world. In Transylvania (Romania), traditionally mown and extensively grazed grasslands have been part of a diverse landscape mosaic for centuries. In contrast to Western European countries, these species-rich grasslands are still present in Transylvania, but have declined in recent years, due to the pressure of intensification or abandonment, and inconsistent land use policies. The quality of these grasslands could easily be assessed using plants and butterflies, which are considered among the best indicators for habitat quality because of their characteristic response to land use change. Our study aimed to assess butterfly and plant community assemblages, richness and diversity in Transylvania’s most typical grassland type, by using transect and relevé methods. We investigated the drivers of change in butterfly and plant community assemblages, and decline in biodiversity of basiphilous dry grasslands. We found that present and past land use practices, geographic distance between sites and soil physical–chemical characteristics have major impacts on different aspects of plant and butterfly diversity (like species composition and richness). Grasslands that were converted to croplands in the past have lost their typical species assemblages and have not completely recovered in the last 30 years. Mown grasslands supported the most diverse communities of butterflies and plants, and diversity declined with land use change to extensive and then intensively grazed pastures. For the conservation of basiphilous dry grasslands in Transylvania, we recommend a case-by-case analysis of grasslands, with emphasis on prioritizing long-term traditional mowing when applying agro-environmental schemes.