Biochar, a carbonaceous material derived from biomass, has garnered significant attention for its biomedical applications due to its unique physicochemical properties. Recent advances in functionalized and composite biochar materials have enabled their use in antibacterial and anticancer treatments, as well as biosensing technologies. This review highlights recent advances in the use of biochar for antimicrobial, anticancer, and biosensing applications. Derived from plant-, marine-, or animal-based biomass through pyrolysis, biochar can be functionalized with silver nanoparticles, metal oxides, or polymers to enhance its antimicrobial activity. In anticancer research, biochar demonstrates the ability to inhibit cancer cell proliferation, modulate the cell cycle, and deliver targeted therapeutics, showing selective cytotoxicity against specific cancer cell types. Furthermore, biochar-based biosensors, when integrated with biomolecules such as enzymes, DNA, or antibodies, exhibit high sensitivity and specificity, making them suitable for precise disease diagnostics. These findings suggest that biochar holds significant potential as a sustainable biomedical material, offering alternatives to conventional antibiotics, supporting cancer therapy, and enabling sensitive biosensing platforms. Future functionalization strategies may further facilitate its clinical translation and practical applications.