Halting current rates of biodiversity loss will be a defining challenge of the 21st century. To assess the effectiveness of strategies to achieve this goal, indicators and tools are required that monitor the driving forces of biodiversity loss, the changing state of biodiversity, and evaluate the effectiveness of policy responses. Here, we review the use of indicators and approaches to model biodiversity loss in Life Cycle Assessment (LCA), a methodology used to evaluate the cradle-to-grave environmental impacts of products. We find serious conceptual shortcomings in the way models are constructed, with scale considerations largely absent. Further, there is a disproportionate focus on indicators that reflect changes in compositional aspects of biodiversity, mainly changes in species richness. Functional and structural attributes of biodiversity are largely neglected. Taxonomic and geographic coverage remains problematic, with the majority of models restricted to one or a few taxonomic groups and geographic regions. On a more general level, three of the five drivers of biodiversity loss as identified by the Millennium Ecosystem Assessment are represented in current impact categories (habitat change, climate change and pollution), while two are missing (invasive species and overexploitation). However, methods across all drivers can be greatly improved. We discuss these issues and make recommendations for future research to better reflect biodiversity loss in LCA.