Biochar is traditionally used to improve soil properties in arable land and as adsorbent or precursor of activated carbon in wastewater treatment. Recent advances have shown biochar potentials in enhancing productions of biofuels and chemicals such as bio-ethanol, butanol, methane, hydrogen, bio-diesel, hydrocarbons and carboxylic acids. The properties of biochar such as high levels of porosity, functional groups, cation exchange capacity, pH buffering capacity, electron conductivity, and macro-/micro- nutrients (Na, K, Ca, Mg, P, S, Fe, etc.) provide appropriate conditions to relieve physicochemical stresses on microorganisms through pH buffering, detoxification, nutrients supply, serving as electron carrier and supportive microbial habitats. This paper critically reviewed biochar production and characteristics, biochar utilization in anaerobic digestion, composting, microbial fermentation, hydrolysate detoxification, catalysis in biomass refinery and biodiesel synthesis. This review provides novel vision of biochar application, which could guide future research towards cleaner and more economic production of renewable fuels and bio-based chemicals.