Surrogates and indicators of biodiversity are used to infer the state and dynamics of species populations and ecosystems, as well as to inform conservation and management actions. Despite their widespread use, few studies have examined how ecological theory can guide the selection or surrogates and indicators, and thus reduce the likelihood of failure or cost of validation. We argue that ecological niche theory and knowledge of the extent to which particular limiting factors (e.g. physiological tolerances, limits to growth rates, or competitive exclusion) affect species distributions, abundance and coexistence could inform the choice of potential surrogates. Focusing on the environmental characteristics that define species niches makes it possible to identify situations where surrogates are likely to be ineffective, such as when there is no mechanistic basis for a candidate surrogate to be related to a biodiversity target. We describe two case studies where different candidate surrogate variables are shown to have contrasting potential as indicators of sustainable farming. Variables not mechanistically linked to the driver of change or responsive over appropriate timeframes or spatial scales are suggested a priori to be uninformative. The niche concept provides a framework for exploring ecological relationships that can inform the selection or exclusion of potential biodiversity surrogates. We think that this new approach to integrating ecological theory and application could lead to improved effectiveness of biodiversity monitoring and conservation.