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Biochar research has experienced a significant increase in the recent two decades. It is growing quickly, with hundreds of reviews, including meta-analyses, that have been published reporting diverse effects of biochar on soil properties and plant performance. However, an in-depth synthesis of biochar–soil interactions at the molecular level is not available. For instance, in many meta-analyses, the effects of biochar on soil properties and functions were summarized without focusing on the specificity of the biochar and soil properties. When applied to soils, biochar interacts with different soil components including minerals, organic matter, gases, liquids, and nutrients, while it also changes soil microbial community structure and their occurrence. These different interactions modify soil physicochemical properties with consequences for dynamic changes in nutrient availability and, thus, plant performance. This review systematically analyzed biochar effects on soil properties and functions: (a) soil physical properties; (b) chemical properties; (c) biological properties; and (d) functions (plant performance, nutrient cycling, etc.). Our synthesis revealed that the surface properties of biochar (specific surface area and charge) and its associated nutrient content determine its role in the soil. At the same time, the extent of changes depends on soil properties, suggesting that both biochar and soil properties need to be considered for harvesting benefits of biochar application. Altogether, we believe our synthesis will provide a guide for researchers and practitioners for future research as well as large-scale field applications.