AbstractOil palm agriculture is rapidly expanding in the Neotropics, at the expense of a range of natural and seminatural habitats. A key question is how this expansion should be managed to reduce negative impacts on biodiversity. Focusing on the Llanos of Colombia, a mixed grassland–forest system identified as a priority zone for future oil palm development, we survey communities of ants, dung beetles, birds and herpetofauna occurring in oil palm plantations and the other principal form of agriculture in the region – improved cattle pasture – together with those of surrounding natural forests. We show that oil palm plantations have similar or higher species richness across all four taxonomic groups than improved pasture. For dung beetles, species richness in oil palm was equal to that of forest, whereas the other three taxa had highest species richness in forests. Hierarchical modelling of species occupancy probabilities indicated that oil palm plantations supported a higher proportion of species characteristic of forests than did cattle pastures. Across the bird community, occupancy probabilities within oil palm were positively influenced by increasing forest cover in a surrounding 250 m radius, whereas surrounding forest cover did not strongly influence the occurrence of other taxonomic groups in oil palm. Overall, our results suggest that the conversion of existing improved pastures to oil palm has limited negative impacts on biodiversity. As such, existing cattle pastures of the Colombian Llanos could offer a key opportunity to meet governmental targets for oil palm development without incurring significant biodiversity costs. Our results also highlight the value of preserving remnant forests within these agricultural landscapes, protecting high biodiversity and exporting avian ‘spill‐over’ effects into oil palm plantations.