Dyes (colorants) are used in many industrial applications, and effluents of several industries contain toxic dyes. Dyes exhibit toxicity to humans, aquatic organisms, and the environment. Therefore, dyes containing wastewater must be properly treated before discharging to the surrounding water bodies. Among several water treatment technologies, adsorption is the most preferred technique to sequester dyes from water bodies. Many studies have reported the removal of dyes from wastewater using biochar produced from different biomass, e.g., algae and plant biomass, forest, and domestic residues, animal waste, sewage sludge, etc. The aim of this review is to provide an overview of the application of biochar as an eco-friendly and economical adsorbent to remove toxic colorants (dyes) from the aqueous environment. This review highlights the routes of biochar production, such as hydrothermal carbonization, pyrolysis, and hydrothermal liquefaction. Biochar as an adsorbent possesses numerous advantages, such as being eco-friendly, low-cost, and easy to use; various precursors are available in abundance to be converted into biochar, it also has recyclability potential and higher adsorption capacity than other conventional adsorbents. From the literature review, it is clear that biochar is a vital candidate for removal of dyes from wastewater with adsorption capacity of above 80%.