There is an urgent need to develop agricultural methods that balance water supply and demand while at the same time improve resilience to climate variability. A promising instrument to address this need is biochar – a charcoal made from pyrolyzed organic material. However, it is often unclear how, if at all, biochar improves soil water availability, plant water consumption rates and crop yields. To address this question, we synthesized literature-derived observational data and evaluated the effects of biochar on evapotranspiration using a minimal soil water balance model. Results from the model were interpreted in the Budyko framework to assess how climatic conditions mediate the impacts of biochar on water fluxes. Our analysis of literature-derived observational data showed that while biochar addition generally increases the soil water holding capacity, it can have variable impacts on soil water retention relative to control conditions. Our modelling demonstrated that biochar increases long-term evapotranspiration rates, and therefore plant water availability, by increasing soil water retention capacity – especially in water-limited regions. Biochar amendments generally increased crop yields (75% of the compiled studies) and, in several cases (35% of the compiled studies), biochar amendments simultaneously increased crop yield and water use efficiencies. Hence, while biochar amendments are promising, the potential for variable impact highlights the need for targeted research on how biochar affects the soil-plant-water cycle. Display omitted •Data synthesis shows biochar generally increases soil water retention capacity.•In some cases, biochar improved both crop yields and water use efficiencies.•Modelling found biochar to consistently increase ET rates, mainly in water limited regions.•Biochar may boost agricultural yield and resilience to variability of rainfall.•Theory-practice gap of biochar effects on soil water: integrative research needed.