Transforming food systems to ensure adequate and nutritious food while minimising negative environmental and societal impacts requires direct stakeholder involvement in developing nature-based solutions (NbS) for sustainable rural development. The Living Labs (LLs) approach, characterised by open innovation and user-centred design, is gaining attraction as a collaborative space where users co-create, test, and evaluate innovations in realworld settings. While LLs are well established in various fields, their application in agriculture, particularly in forestry and agroforestry, is relatively new. This review highlights, for the first time, the implementation of LLs across agriculture, forestry, and agroforestry sectors. It addresses key concepts of LLs and examines their implementation, benefits, and challenges. Notably, we illustrate and discuss findings from case studies such as REFOREST and SALAM-MED LLs, with the objectives to 1) demonstrate how, in some study cases, LLs can foster stakeholder engagement and co-create knowledge to develop innovative solutions for ecosystem restoration and economic resilience; 2) evaluate the effectiveness of LLs in promoting sustainable practices and propose guidelines for their better implementation; and 3) carry out a comparative analysis to highlight the differences in terms of methodologies, stakeholder involvement, and outcomes between European and North American LL models. While the comparative analysis indicates the need for further investigation, particularly in the economic evaluation of these approaches, this review underscores, in general, the necessity for continued research to optimise the role of LLs in promoting sustainable innovation and collaboration among diverse stakeholders. It aims to enhance understanding of how LLs can improve sustainability in land-use practices while guiding future research and policy development.