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Biochar, that is, carbonized biomass similar to charcoal, has been used in acute medical treatment of animals for many centuries. Since 2010, livestock farmers increasingly use biochar as a regular feed supplement to improve animal health, increase nutrient intake efficiency and thus productivity. As biochar gets enriched with nitrogen-rich organic compounds during the digestion process, the excreted biochar-manure becomes a more valuable organic fertilizer causing lower nutrient losses and greenhouse gas emissions during storage and soil application. Scientists only recently started to investigate the mechanisms of biochar in the different stages of animal digestion and thus most published results on biochar feeding are based so far on empirical studies. This review summarizes the state of knowledge up to the year 2019 by evaluating 112 relevant scientific publications on the topic to derive initial insights, discuss potential mechanisms behind observations and identify important knowledge gaps and future research needs. The literature analysis shows that in most studies and for all investigated farm animal species, positive effects on different parameters such as toxin adsorption, digestion, blood values, feed efficiency, meat quality and/or greenhouse gas emissions could be found when biochar was added to feed. A considerable number of studies provided statistically non-significant results, though tendencies were mostly positive. Rare negative effects were identified in regard to the immobilization of liposoluble feed ingredients (e.g., vitamin E or Carotenoids) which may limit long-term biochar feeding. We found that most of the studies did not systematically investigate biochar properties (which may vastly differ) and dosage, which is a major drawback for generalizing results. Our review demonstrates that the use of biochar as a feed additive has the potential to improve animal health, feed efficiency and livestock housing climate, to reduce nutrient losses and greenhouse gas emissions, and to increase the soil organic matter content and thus soil fertility when eventually applied to soil. In combination with other good practices, co-feeding of biochar may thus have the potential to improve the sustainability of animal husbandry. However, more systematic multi-disciplinary research is definitely needed to arrive at generalizable recommendations.