This study aims to explore novel, environmentally friendly technologies for converting organic waste into biochar for land application for sustainable management. However, the impact of biochar on the soil environment and crop yield depends on the specific feedstock and its interaction with the soil. Through pot experiments, we investigated the effects of three different biochars (sawdust biochar, rice straw biochar and coconut shell biochar) on the growth of Dictyophora rubrovolvata at two different input levels (1% and 2%). It was found that contrary to expectations, high input levels of sawdust biochar had a negative impact on D. rubrovolvata yield, while rice straw biochar and coconut shell biochar increased D. rubrovolvata yield by 16.0% to 159.1% and 54.4% to 64.0%, respectively, at the two input levels. The study revealed the key role of soil factors (such as total phosphorus, nitrogen/phosphorus ratio, water holding capacity, ammonium nitrogen, nitrate nitrogen, CaCl2‐phosphorus, dissolved organic carbon and invertase activity) in affecting the growth of D. rubrovolvata. Through structural equation modelling analysis, the application of sawdust biochar resulted in a low N/P ratio, thereby limiting the growth of D. rubrovolvata, while the application of straw biochar and coconut shell biochar promoted mushroom growth by increasing sucrase activity and DOC content. The increase in D. rubrovolvata biomass and nutrient content indicated the superiority of RSBC and CSBC as soil amendments. However, further research is needed to determine the appropriate application scenarios for SDBC. The findings also show that the application of biochar can help improve soil physicochemical biological properties, thus having potential benefits in sustainable agricultural practices. Overall, this study provides insights into the potential of biochar technology in sustainable agricultural practices, its role in improving soil quality and crop productivity, and explores for the first time a new field of biochar application in D. rubrovolvata cultivation.