<p> Container production faces water scarcity and limited peat moss resources, creating an urgency to improve water use efficiency and find alternatives to peat. Biochar shows promise, but its combined use with sensor-based irrigation on substrate water retention and efficiency is underexplored. This study investigated biochar’s effects on plant performance under three substrate matric potentials. Nine treatments were created with three rates of biochar (0%, 15%, and 25%, by volume) and three substrate matric potentials (-5, -3.5, and -2 kPa), corresponding to low, medium, and high irrigation levels achieved by sensor-based irrigation. The substrate property changes and the morpho-physiological performance of tomato (<i>Solanum lycopersicum</i>, ‘Micro-Tom’) and kale (<i>Brassica oleracea,</i>‘Cane Pink’) were measured biweekly. Results showed that biochar-amended substrates significantly improved substrate water retention and volumetric water content. The highest biomass of tomato plants was observed in 25% biochar treatments under medium irrigation, while fresh fruit yield did not differ significantly among treatment. Kale yielded the highest fresh biomass with 25% biochar under low irrigation. The results suggested that biochar-induced changes in substrate hydraulic properties that influence plant growth. Overall, biochar can potentially partially replace peat in soilless substrate without reducing crop productivity and may provide greater benefit for water-demanding crops under limited irrigation, supporting its potential as more sustainable substrate amendment in nursery production.</p>