<p>Application of biochar to soil is a novel technique for enhancing the fertility of soil as well as plant productivity. Biochar is a solid, carbon-rich material generally obtained by pyrolysis using different biomasses. After harvest, crop residues accumulated in the field can be used to make biochar along with inorganic fertilizer. The production of biochar can be achieved using material such as wood chips, crop residues like straw, husk, trash and organic matter from industries. Biochar makes soil fertile mainly because it adds organic carbon, slowly releases nutrients through chelation, improves water holding capacity as well as porosity of the soil and enhances soil microbial populations as well as enzymatic activities. Moreover, biochar also plays an important role in alleviating the abiotic stresses by degrading the reactive oxygen species and enhancing the antioxidant properties of crops plant and increasing their yield (26.5&#xa0;kg/ha). Therefore, this review deals on the literature related to biochar, its production and characterization and its role in modulating the soil properties and plant yield. It also focuses on the role of biochar in modulating nodule potential and process of nitrogen metabolism by improving nodule number and enhancing the expression of nitrogen fixing gene.</p>