Ecological restoration in dredging areas has attracted increasing attention. The reconstruction of a submerged plant ecosystem is an important method for aquatic ecosystem restoration. This study has systematically investigated the effect of biochar-improved sediment on the plant growth and decontamination efficiency of a constructed ecosystem. Microbial community composition and structure in the sediment were detected. The results showed that a supplement of 20 mg/g of biochar significantly increased the biomass of the submerged plants compared with other doses (0, 10, and 40 mg/g). The biomass and chlorophyll content were significantly inhibited by supplementing 40 mg/g of biochar. In the Ceratophyllum demersum L. system, TP and NH4+-N concentrations were significantly lower after treatment with 20 mg/g of biochar compared to other doses. In Vallisneria spiralis L. and Hydrilla verticillata (L. f.) Royle systems, NH4+-N, TP, and DO concentrations were significantly different among different biochar treatments. In general, 20 mg/g of biochar improved water quality in different submerged plant systems, while 40 mg/g of biochar had adverse effects on water quality, such as higher NH4+-N and TP concentrations. The dominant microbial community included Proteobacteria, Acidobacteria, Chloroflexi, Actinobacteriota, and Bacteroidota. The structure and function of microbial communities were different among submerged plants and biochar treatments. Our results proposed a construction strategy of submerged plants in the dredging area.