<p>Biochar is a porous carbon material produced through the pyrolysis of various organic materials. A two-year greenhouse pot experiment was conducted to investigate the effects of biochar additives (B) in combination with three irrigation levels (I) on the growth, physiology, and water use efficiency of sweet basil. The experimental treatments included three irrigation levels (75%, 100%, and 125% of field capacity [FC]) as main plots and four biochar concentrations (0%, 1%, 3%, and 5% w/w) as sub-plots. The results showed significant effects of biochar and irrigation treatments on plant growth (<i>p</i> &lt; 0.01). Compared to the control (100% FC, 0% biochar), the 75% FC irrigation treatment reduced plant height by 21% (<i>p</i> &lt; 0.01), stem diameter by 23% (<i>p</i> &lt; 0.01), and leaf area by 52% (<i>p</i> &lt; 0.01), while the 125% FC treatment increased these metrics by 5–51% (<i>p</i> &lt; 0.01). Biochar at 3% concentration optimized growth and water use efficiency (WUE) across all irrigation levels, with 5% showing marginal additional gains, often non-significant (<i>p</i> &gt; 0.05 for some traits). Physiologically, electrolyte leakage rose by 83% under 75% FC (<i>p</i> &lt; 0.01) relative to the control, but biochar amendments mitigated this stress. Relative water content improved with biochar, peaking at a 9.84% increase in year two (<i>p</i> &lt; 0.05). WUE was highest in the I3B3 treatment (2.71–3.42&#xa0;kg/m³, <i>p</i> &lt; 0.01), significantly surpassing the control. These findings provide empirical evidence that biochar at 3% concentration, combined with adequate to slightly excessive irrigation regimes, can effectively optimize sweet basil cultivation through enhanced growth parameters and water use efficiency.</p>