Biodiversity loss is a globally significant problem. Institutional failure to halt this loss suggests current arrangements are not fit for the purpose of conserving biodiversity. The objective of this paper is to diagnose institutional fitness for conserving biodiversity in the Tasmanian Midlands of Australia, a highly modified agricultural landscape with critically endangered biodiversity values. This paper presents and applies a novel diagnostic framework that adopts a broad view of institutional fit, drawing on concepts from adaptive governance, institutional theory, and public administration, and finds four areas of poor fit that can guide reform efforts. The first is a narrow framing of biodiversity objectives, leading to neglect of key social and ecological concerns. Second, the interplay of current arrangements fails to buffer key economic and political drivers, and compromises adaptive capacity. Third, limited government authority and embedded power relations raise questions about the effectiveness and fairness of current approaches. Finally, the reluctance of governments to devolve authority and decision-making powers to self-organizing networks constrains adaptation. This suite of fit problems constrains achievement of biodiversity conservation, particularly in dealing with landscape multifunctionality, the need to balance private landholder rights and responsibilities, and the need to consider how to respond to emerging novel and hybrid ecosystems.