Biochar, a sustainable solid material derived from biomass pyrolysis enriched in carbon, has emerged as a promising solution for soil carbon sequestration. This comprehensive review analyzes the current knowledge on biochar’s application in this context. It begins by examining biochar properties and production methods, highlighting its recalcitrant nature as a potential stable carbon sink. The influence of various feedstocks and pyrolysis conditions on various physicochemical properties of biochar and its soil carbon sequestration potential is explored. Mechanisms through which biochar enhances soil carbon sequestration are discussed, including its role as a physical barrier against carbon loss and its ability to promote stable soil aggregates and influence soil microorganisms. Challenges and limitations, such as variations in biochar properties and optimal application rates, are addressed, along with strategies for maximizing biochar effectiveness through amendments. The review concludes by emphasizing the importance of long-term field studies, standardized protocols, and economic assessments to support the widespread adoption of biochar for soil carbon sequestration and its potential in climate change mitigation.