As the by-product of wastewater treatment, a large amount of sludge is generated annually. Turning this waste into a resource is a feasible and sustainable strategy to reduce potential environmental risks and recover energy. As a way to realize the international goal of carbon dioxide emission peak and carbon neutrality, producing biochar from sludge has gained worldwide attention. This review evaluates recent progress in synthesis techniques for biochar of sludge origin. Different preparation techniques and their key affecting factors are compared and described. The obtained sludge-derived biochar could be employed for eliminating aqueous pollution or purifying wastewater, mainly through adsorption and catalytic reactions. The removal of various pollutants by sludge-derived biochar and its related mechanisms are discussed and summarized in detail. This review will be conducive for a comprehensive understanding of recent progress in sludge-derived biochar study and for guiding the purposeful production of biochar, as well as for developing wastewater purification technology based on sludge-derived biochar.