In this study, lotus stem (LS), a natural, abundant, and underutilized aquatic agricultural waste, was used to prepare biochar (BC) as a potential adsorbent for sewage treatment. A two-step process for the production of LS based nitrogen-doped BC (NLBC) has been developed, involving low-temperature pyrolysis of LS and urea mixture, followed by high-temperature pyrolysis of the pre-carbonized BC via NaOH immersion technique. The two-step activation treatment not only can effectively maintain the structural integrity of LS, but contribute to exposing more active sites for effective adsorption of methylene blue (MB). The obtained NLBC possesses a large pore volume (0.997 cm3 g−1) and great specific surface area of 1478.93 m2 g−1, contributing to its maximum adsorption capacity of 2320.81 mg g−1 for MB. The behavior of MB adsorbed onto NLBC conforms to pseudo-second-order kinetics and Langmuir–Freundlich models. The adsorption capacity remains stable across a range of pH, varying salt concentrations, and cyclic repetitions. The adsorption mechanism was ascribed to the synergetic effects of pore filling, H-bonding, and electrostatic interaction through comparative analysis before and after adsorption. The results indicate that NLBC is an environmentally friendly, cost-effective, and efficient for dye-containing wastewater treatment.