Biochar has demonstrated unique characteristics like high surface area, rich porous network, favorable surface functionality, as well as material stability; making it amenable to various applications like in wastewater remediation, soil enrichment, agricultural production, waste management, enhancements in biofuels production, control of greenhouse gas emissions (GHG), and many more. Also, production of biochar from various agro-based waste matrices has opened the pathway for sustainability, circular economy, as well as resource and waste management. But there have been well-defined and scientifically identified potential negative features of biochar during its interaction with environment that has caused adverse impacts. During its interaction with soil or with water or with the atmosphere, when biochar is applied as a soil amendment or as adsorbent for wastewater remediation or for capture of GHG, there has been observed leaching of noxious pollutants like heavy metal ions, polycyclic aromatic hydrocarbons, dioxins, toxic gaseous emissions like N2O, CO2, etc. Release of such leachates has been observed to cause a significant change in the soil/water/air characteristics, adversely affecting the crops, agricultural produce, water, as well as the air quality. The ultimate repercussion has been observed on the health of the soil/water microbial community, aquatic community, plants, animals, and humans. Biochar application has showed toxic effects to the germination and growth of plants. Details of the harmful components of biochar because of non-judicious selection of precursor during fabrication as well as its adverse characteristics due to its nano-size is not only the basis of this chapter, but also a close discussion on the exact negative impact of biochar on the soil, water, and air dynamics is reviewed. Finally, measures adopted till date to reduce the toxic effects of biochar, viz., during fabrication, as well as during application have been elaborated. The objective of the overview presented is the wider dissemination to adopt future research objectives for either carrying out a production-toxicity inter-relationship assessment or structure–toxicity inter-relationship assessment or elucidation of the mechanistic aspect of the biochar interactions with the biota.