Biochar’s potential to remove various contaminants from aqueous solutions has been widely discussed. The rapid development of engineered biochar produced using different feedstock materials via various methods for wastewater treatment in recent years urges an up-to-date review on this topic. This article centers on summarizing state-of-the-art methods for engineered biochar production and discussing the multidimensional benefits of applying biochar for water reuse and soil amendment in a closed-loop agriculture system. Based on numerous recent articles (<5 years) published in journals indexed in the Web of Science, engineered biochar’s production methods, modification techniques, physicochemical properties, and performance in removing inorganic, organic, and emerging contaminants from wastewater are reviewed in this study. It is concluded that biochar-based technologies have great potential to be used for treating both point-source and diffuse-source wastewater in agricultural systems, thus decreasing water demand while improving crop yields. As biochar can be produced using crop residues and other biomass wastes, its on-farm production and subsequent applications in a closed-loop agriculture system will not only eliminate expensive transportation costs, but also create a circular flow of materials and energy that promotes additional environmental and economic benefits.