1. We studied the community and food-web structure of trap-nesting insects in restored meadows and at increasing distances within intensively managed grassland at 13 sites in Switzerland to test if declining species diversity correlates with declining interaction diversity and changes in food-web structure. 2. We analysed 49 quantitative food webs consisting of a total of 1382 trophic interactions involving 39 host/prey insect species and 14 parasitoid/predator insect species. Species richness and abundance of three functional groups, bees and wasps as the lower trophic level and natural enemies as the higher trophic level, were significantly higher in restored than in adjacent intensively managed meadows. Diversity and abundance of specific trophic interactions also declined from restored to intensively managed meadows. 3. The proportion of attacked brood cells and the mortality of bees and wasps due to natural enemies were significantly higher in restored than in intensively managed meadows. Bee abundance and the rate of attacked brood cells of bees declined with increasing distance from restored meadows. These findings indicate that interaction diversity declines more rapidly than species diversity in our study system. 4. Quantitative measures of food-web structure (linkage density, interaction diversity, interaction evenness and compartment diversity) were higher in restored than in intensively managed meadows. This was reflected in a higher mean number of host/prey species per consumer species (degree of generalism) in restored than in intensively managed meadows. 5. The higher insect species and interaction diversity was related to higher plant species richness in restored than in intensively managed meadows. In particular, bees and natural enemies reacted positively to increased plant diversity. 6. Our findings provide empirical evidence for the theoretical prediction that decreasing species richness at lower trophic levels should reduce species richness at higher trophic levels, and in addition lead to even stronger reductions in interaction diversity at these higher levels. Species at higher trophic levels may thus benefit relatively more than species at lower trophic levels from habitat restoration in the grassland ecosystems studied. We also demonstrate enhanced compartment diversity and lower interaction evenness in restored than in intensively managed meadows, both of which are theoretically positively associated with increased ecosystem stability in restored meadows.