Mountain farming in Europe is based mainly on ruminant livestock and utilization of locally produced forage resources by grazing and hay. Farmland extends from mountains in the eastern Mediterranean to the Atlantic coast, with major areas at the highest elevations in central Europe, thus encompassing wide variation in geology, soil, altitude, slope, climate and vegetation communities. Despite this variation there are some common features, problems and opportunities. Agriculture in mountain areas seldom competes economically with lowland farming because production costs are high or labour-intensive, growing and grazing seasons are short, and annual forage production levels are low. The paper discusses the utilization of pasture resources and the need for continued management of hay meadows and grazed mountain pastures to maintain traditional landscapes and ecosystem services; these can be supported through agro-environmental support measures. Opportunities for high value niche-market products (organic, origin-based, or with food-quality attributes linked to the mountain environment) are discussed in relation to potential for improving farm incomes.