The current research encompasses utilization of peanut shells (PS) as feedstock for pyrolysis carried out at various temperatures (250, 400, and 550 °C) for deriving biochar, namely PS-BC250, PS-BC400, and PS-BC550. After analyzing the biochar types physicochemically, it was applied as a soil ameliorant for the growth of cucumber. The results showed that in prepared biochar type, bulk density, volatile contents, hydrogen, oxygen, and nitrogen content decreased, whereas pH, electrical conductivity, ash content, fixed carbon content, and surface area increased with the increasing temperature. Scanning electron microscopy (SEM) and Fourier Transform Infrared Spectroscopy (FTIR) presented high porosity, re-orientation of vessels, and a greater number of aromatic compounds, respectively, for PS-BC prepared at 550 °C. On applying PS-BC250, PS-BC400, and PS-BC550 as amendments in potted soil at 2, 4, and 6% (w/w), it improved soil quality (viz pH, ECe, BD, and soil water holding capacity) and increased the yield of cucumber. Because of improved soil properties and crop yield, PS-BC550 at the rate of 4% (w/w) demonstrated a great potential for agricultural application while provisioning dual circular economic indicators in the form of diverting PS waste to an effective alternative of chemical fertilizer having intensive carbon footprints in cucumber production.