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Agriculture and especially dairy production cause considerable environmental impacts. Therefore, the growing world population and food demand long for sustainable agricultural practices which aim at producing more food without intensifying the pressure on limited resources and the environment. At the same time, agriculture also provides several other benefits to society, which should not be neglected. In this study, we combined life cycle assessment (LCA) and data envelopment analysis (DEA) to assess the eco-efficiency of 44 dairy farms and simultaneously considered multiple functions of agriculture. Additionally, we addressed the improvement of non-eco-efficient farms by pointing out specific management options which promote the farms’ eco-efficiency. The results revealed a high diversity in fulfilling the different functions of agriculture among the 44 dairy farms. We found that the 21 organic dairy farms scored a higher mean eco-efficiency than the 23 conventionally operated dairy farms. The improvement of eco-efficiency showed a high diversity since it can be accomplished by either increasing the outputs or decreasing the inputs. A central source, which affects all inputs and outputs, is the purchased concentrate. However, we conclude that there is no “one-size-fits-all” concept of improving the eco-efficiency of multifunctional dairy farming. Instead, there is always a farm-individual path of increasing ecoefficiency, which depends on the farm’s status quo, the efficiency of managing resources, nutrients, and other inputs, and the farmer’s choice to position the farm along the trajectory between input minimizing and output maximizing.