Biochar is a stable carbon-rich product loaded with upgraded properties obtained by thermal cracking of biomasses in an oxygen-free atmosphere. The pristine biochar is further modified to produce engineered biochar via various physical, mechanical, and chemical methods. The hasty advancement in engineered biochar synthesis via different technologies and their application in the field of energy and environment is a topical issue that required an up-to-date review. Therefore, this review deals with comprehensive and recent mechanistic approaches of engineered biochar synthesis and its further application in the field of energy and the environment. Synthesis and activation of engineered biochar via various methods has been deliberated in brief. Furthermore, this review systematically covered the impacts of engineered biochar amendment in the composting process, anaerobic digestion (AD), soil microbial community encouragement, and their enzymatic activities. Finally, this review provided a glimpse of the knowledge gaps and challenges associated with application of engineered biochar in various fields, which needs urgent attention in future research.