<p>Constructed wetlands (CWs) are emerging as sustainable, nature-based solutions for decentralized wastewater treatment. This review critically examines the role of agricultural waste-derived biochar as a performance-enhancing amendment in CWs, focusing on its dual role in pollutant removal and microbial dynamics. Biochar-amended CWs have shown removal efficiencies up to 90% for total nitrogen and 80–95% for pharmaceuticals such as tetracycline and ciprofloxacin, primarily due to biochar’s high porosity, adsorption capacity, and redox activity. Importantly, biochar significantly alters microbial communities by enriching key functional taxa like <i>Nitrosomonas</i>, <i>Thauera</i>, and <i>Pseudomonas</i>, increasing their abundance by up to 48-fold and enhancing genes involved in denitrification. These shifts support advanced degradation mechanisms such as direct interspecies electron transfer (DIET) and redox-mediated biotransformation. Unlike previous reviews that focus on material properties, this study provides a systems-level synthesis linking biochar’s physical, chemical, and microbial roles in CWs. It identifies key research gaps, including long-term field validation, biochar regeneration, and mechanistic quantification of redox processes. The review also proposes a practical roadmap involving AI-based metagenomic tools, hybrid material strategies, and rural deployment models. Overall, it highlights how agricultural residue valorization through biochar-enhanced CWs supports key Sustainable Development Goals and reinforces the Water–Energy–Food Nexus.</p> Graphical Abstract <p></p>