Agroecology Living Labs (ALL) are a promising approach to support food system transformation toward sustainability. Amid rapid uptake in Europe, we critically review the foundational literature supporting ALL: sustainable transition and innovation theories and the literature on agricultural knowledge and innovation systems to highlight transformative potential. To conduct this review, a diverse team of both social and natural scientists engaged in a co-creation process. We found that transformative ALL: 1) align methods with agroecology principles, 2) utilize place-based transformation approaches, and 3) foster a paradigm shift to participatory knowledge production. We identify seeds of transformation or cross-cutting characteristics across dominant theories and research approaches to fill political space and support transformative ALL. The first seed emphasizes moving beyond technical innovation toward socio-ecological system governance. The second seed promotes developing ALL at the territory/landscape scale as a mediator for open innovation across the science-policy-society nexus. The third seed highlights the transformative potential of inclusive and participatory knowledge production within structures that scale via networks. ALL, if methodically facilitated and supported across decision-making scales, have the potential to usher in a new transformative participatory paradigm in Europe toward more agroecological sustainable food systems at the science-policy-society nexus.