Smallholder farmers in Ethiopia, Malawi and Tanzania are under pressure to sustainably improve agricultural production and manage the environment due to limited access to agricultural inputs. Limited application of biochar among farmers is caused by scattered research findings. Thus, the focus of this review is to critically analyze the current state of knowledge regarding biochar technology in the cases of Ethiopia, Malawi, and Tanzania. The smallholder farmers in these countries commonly use cheap and portable tools and techniques with low cost for biochar production such as open pile burns and open earth pit-based biochar production. Depending on the availability of labor and farming system, farmers apply biochar in the fields by either broadcasting, furrow application, band placement, spot placement, or ring application. Farmers also integrate biochar with co-composting with nutrient-rich manure, and animal and human urine for soil fertility management. Several studies have confirmed that biochar has a great role in sustaining agriculture through improving soil fertility, crop production, adsorbing pollutants, and mitigating climate change. Biochar is also an important feed additive when mixed with animal diets for cattle, poultry, pigs, and fish, and improves the quality and amount of animal production. However, feed stock resources competition of crop residue for biochar is less preferred than its use for animal feed, mulching under conservation agriculture. Use of wood for biochar production may cause deforestation and degradation. Use of alternative resources such as invasive plant species and organic wastes for biochar production is important. The smallholder farmers hold diverse perceptions about biochar, shaped by their experiences, knowledge, and socio-economic context. In general, biochar is an input for amendment of degraded soils, maintenance of long-term soil functions and carbon sequestration in a soil and reduction of GHG emissions in developing countries.