Anaerobic biological treatment of waste activated sludge (WAS) is proven as a low-carbon footprint technology with dual advantages of bio-fuel recovery and sludge stabilization. However, sludge residue after anaerobic biological treatment has been a serious obstacle to build waste-free cities. In this study, sludge residue, iron-rich sludge residue, and iron-rich fermented sludge residue were selected as the raw materials of biochar and the roles of prepared biochar in anaerobic digestion of WAS were investigated. Results indicated that the prepared biochar improved methane production and biochar derived from iron-rich fermented sludge residue (PFF-BC) obtained the best performance, with an increment of 23.4%. Mechanism analysis illustrated that the structural characteristics of PFF-BC were updated, including iron species, defect levels, and specific surface area, which played positive roles in the conversion of intermediate metabolites. Meanwhile, the compositions and electro-activity properties of extracellular polymeric substances were both stimulated by PFF-BC. Correspondingly, the activities of electron transport system and cytochrome c increased by 23.4% and 36.7%, respectively. For microbial communities, the abundances of electroactive microorganisms (such as Anaerolineaceae, Syntrophomonas and Methanosaeta) increased and direct interspecies electron transfer might be established, improving CO2-reduction and acetoclastic methanogenesis pathways. These findings will provide important references for stepwise resource recovery and final disposal of WAS.