Hydrothermal carbonization (HTC) has gained a lot of interest in the last few years for the process production of hydrochar from the different kinds of biological materials such as agricultural waste. Therefore, a thorough review of the literature on HTC has been conducted, which is more energy-efficient and involves hydrochar preparation at a lower temperature without any specific requirements for pressure. This review article primarily differentiates between the hydrochar and biochar developed from various sources. Also, a comparative analysis has been done to evaluate the maximum efficiency of hydrochar production. The various parameters, which influence the hydrochar yield to include pH, temperature, the concentration of the modifying agent, duration of exposure, salt, and phenolic compounds, have also been highlighted in this review. The scale-up processes for industrial level hydrochar production, along with bioreactor designs, have also been discussed. We have also focused on various applications of hydrochar, such as adsorbent in wastewater treatment, carbon sequestration, gas adsorption and in the field of agriculture for soil amendment. The adsorption effects of hydrochar towards the partial and proportionate adsorption of heavy metals and hazardous chemicals have been depicted. This review of the literature clearly illustrates the role of HTC in environmental remediation of soil, air and water and its usage in various industries.