There is a growing body of research that recognizes the potentials of biochar application in agricultural production systems. However, little is known about the effects of biochar, especially hydrochar, on production of containerized seedlings under nursery conditions. This study aimed to test the effects of hydrochar application on growth, quality, nutrient and heavy metal contents, and mycorrhizal association of containerized pine seedlings. The hydrochar used in this study was produced through hydrothermal carbonization of paper mill biosludge at 200 °C. Two forms of hydrochar (powder and pellet) were mixed with peat at ratios of 10% and 20% (v/v) under three levels of applied commercial fertilizer (nil, half and full rates). Application of hydrochar had positive or neutral effects on shoot biomass and stem diameter compared with control seedlings (without hydrochar) under tested fertilizer levels. Analysis of the natural logarithmic response ratios (LnRR) of quality index and nutrient and heavy metal uptake revealed that application of 20% (v/v) hydrochar powder or pellet with 50% fertilizer resulted in same quality pine seedlings with similar heavy metal (Cu, Ni, Pb, Zn and Cr) and nutrient (P, K, Ca and Mg) contents as untreated seedlings supplied with 100% fertilizer. Colonization percentage by ectomycorrhizae significantly increased when either forms of hydrochar were applied at a rate of 20% under unfertilized condition. The results of this study implied that application of proper rates of hydrochar from biosludge with adjusted levels of liquid fertilizer may reduce fertilizer requirements in pine nurseries.