Rapid urban expansion and a booming population are placing immense pressure on our agricultural systems, leading to detrimental impacts on soil fertility and overall health. Due to the extensive use of agrochemicals in agriculture, the necessity to meet the expanding demand for food has also resulted in unsustainable farming practices. Around the world, biochar, a multipurpose carbonaceous material, is being used to concurrently solve issues with enhancing soil fertility, plant growth, and development under both normal and stressful circumstances. It improves water retention, fosters nutrient absorption, and promotes microbial activity, creating a fertile environment that supports sustainable and resilient agriculture. Additionally, biochar acts as a carbon sink, contributing to long-term carbon sequestration and mitigating climate change impacts. The major benefit of biochar is that it helps the adsorption process with its highly porous structures and different functional groups. Understanding the elements involved in biochar formation that determine its characteristics and adsorptive capacity is necessary to assure the viability of biochar in terms of plant productivity and soil health, particularly biological activity in soil. This paper focuses on the development, composition, and effects of biochar on soil fertility and health, and crop productivity.