Farmland diversification practices (i.e., methods used to produce food sustainably by enhancing biodiversity in cropping systems) are sometimes considered beneficial to both agriculture and biodiversity, but most studies of these practices rely on species richness, diversity, or abundance as a proxy for habitat quality. Biodiversity assessments may miss early clues that populations are imperiled when species presence does not imply persistence. Physiological stress indicators may help identify low‐quality habitats before population declines occur. We explored how avian stress indicators respond to on‐farm management practices and surrounding seminatural area (1‐km radius) across 21 California strawberry farms. We examined whether commonly used biodiversity metrics correlate with stress responses in wild birds. We used ∼1000 blood and feather samples and body mass and wing chord measurements, mostly from passerines, to test the effects of diversification practices on four physiological stress indicators: heterophil to lymphocyte ratios (H:L), body condition, hematocrit values, and feather growth rates of individual birds. We then tested the relationship between physiological stress indicators and species richness, abundance, occurrence, and diversity derived from 285 bird point count surveys. After accounting for other biological drivers, landscape context mediated the effect of local farm management on H:L and body condition. Local diversification practices were associated with reduced individual stress in intensive agricultural landscapes but increased it in landscapes surrounded by relatively more seminatural area. Feathers grew more slowly in landscapes dominated by strawberry production, suggesting that nutritional condition was lower here than in landscapes with more crop types and seminatural areas. We found scant evidence that species richness, abundance, occurrence, or diversity metrics were correlated with the individual's physiological stress, suggesting that reliance on these metrics may obscure the impacts of management on species persistence. Our findings underscore the importance of considering landscape context when designing local management strategies to promote wildlife conservation.