Biochar is a carbonaceous solid substance produced due to the thermal decomposition of various types of biomasses. Highly porous stable biochar mainly contains carbon (C) and could be produced from the thermal combustion of crop residues and municipal solid trash in an oxygen-limited atmosphere. The methodologies used for the production are pyrolysis, gasification, hydrothermal carbonization, and torrefaction. However, the production methods differ depending on the type of biomass, temperature, residence time, heating rate, and several other factors. Though biochar could be produced from several sources, plant biomass is an environmentally friendly method that attracted immense attention as a low-cost amendment due to its many potent advantages for agriculture and the environment. Also, it is utilized as a soil amendment, boosts soil fertility, which indirectly influences plant development, and reduces climate change by sequestering C to slow down global warming. Further, it could be utilized in a wide spectrum of applications, including agriculture, environment, energy, and many more. Besides, it could be used as a solution for reducing the carbon dioxide content of air due to its good adsorption properties. However, biochar can also have many negative impacts on the natural environment. For instance, the addition of harmful chemicals such as heavy metals, Polycyclic aromatic hydrocarbons, Environmentally persistent free radicals, and dioxins to the environment, changing physicochemical properties of soil, eutrophication in aquatic environments, and the reduction in microorganism population in soil environments are some of them. Hence, it is necessary to use risk avoidance methods for biochar and understand its future challenges to maximize the gain obtained from biochar without harming the environment and protecting the balance of the environmental systems. Hence, this chapter summarizes the production methods and potential applications of biochar produced from plant biomass sources and their upcoming challenges.