The loss of biodiversity is threatening ecosystem productivity and services worldwide, spurring efforts to quantify its effects on the functioning of natural ecosystems. Previous research has focused on the positive role of biodiversity on resource acquisition (i.e., niche complementarity), but a lack of study on resource utilization efficiency, a link between resource and productivity, has rendered it difficult to quantify the biodiversity–ecosystem functioning relationship. Here we demonstrate that biodiversity loss reduces plant productivity, other things held constant, through theory, empirical evidence, and simulations under gradually relaxed assumptions. We developed a theoretical model named niche–efficiency to integrate niche complementarity and a heretofore-ignored mechanism of diminishing marginal productivity in quantifying the effects of biodiversity loss on plant productivity. Based on niche–efficiency, we created a relative productivity metric and a productivity impact index (PII) to assist in biological conservation and resource management. Relative productivity provides a standardized measure of the influence of biodiversity on individual productivity, and PII is a functionally based taxonomic index to assess individual species’ inherent value in maintaining current ecosystem productivity. Empirical evidence from the Alaska boreal forest suggests that every 1% reduction in overall plant diversity could render an average of 0.23% decline in individual tree productivity. Out of the 283 plant species of the region, we found that large woody plants generally have greater PII values than other species. This theoretical model would facilitate the integration of biological conservation in the international campaign against several pressing global issues involving energy use, climate change, and poverty.