Nature contacts are recognized as positively contributing to humans’ health and well-being. Although there have been projects to green daycare or schoolyards, yard greening and microbial biodiversity have never been studied simultaneously. We asked whether simultaneously increasing biodiversity exposure and greening urban daycare yards affects 3–5 years-old children’s physical activity and play, their environmental relationships, and their perceived well-being. For transforming six daycare yards in Finland, we used a forest floor with high biodiversity, sod, peat blocks, and planters for vegetable and flower growing. We used qualitative interview and survey-based data collected from the daycare personnel and parents to analyze how green yards encourage children’s engagement with their everyday life-worlds. We identified the functional possibilities provided by the yards and the dynamic aspects related to the greening. Green, biodiverse yards were considered safe, and inspired children’s play, diversified their activities, and increased physical activity. The greenery offered embodied experiences of nature and provided the children with multi-sensory exploration and diverse learning situations. The dynamic and emotional ways of engaging with the natural environment increased their well-being. The activities related to caring for the yards and exploring them promoted the development of environmental relationships. The results can be used for designing health-enhancing yards.