ObjectiveUnbalanced competition for water poses a major challenge to intercropping systems in semiarid regions. The role of biochar as a soil amendment in regulating water balance and crop productivity is unclear. MethodsIn this two-year field trial, we investigated the impact of biochar application and method on the relationship between water balance utilization and productivity in maize–alfalfa strip intercropping. Monocropping [sole maize (SM) and sole alfalfa (SA)] and intercropping (I) systems were established, with biochar added to corresponding treatments (SMc, SAc, and Ic) and solely to intercropping alfalfa and maize (IAc and IMc). Results and conclusionsOur findings reveal that the yield of the intercropping system (I) was 11.4 % higher than expected on average. Biochar addition significantly increased forage production and water use efficiency, with similar benefits observed in monocropping systems. While competition ratio (CR) values reduce also reducing competition between maize and alfalfa. In two years, applying biochar solely to alfalfa (IAc) resulted in a higher land equivalent ratio (LER) and water equivalent ratio (WER) of 8.63 % and 12.73 %, respectively, compared with applying biochar solely to maize (IMc). Notably, yield and water use efficiency (WUE) increased the most when biochar was applied to intercropped maize and alfalfa (Ic), increasing by 16.1 %–16.6 % and 6.7 %–10.3 % compared with I, resulting in an increase in economic benefits by 24.9 %–26.3 %. Different biochar application methods showed significant potential in mitigating water competition in intercropping, with both sole and joint applications improving WUE, with the latter (Ic) demonstrating the most pronounced effect. However, excessive soil water consumption poses risks of water overuse, emphasizing the need to balance biochar utilization with water resource management. SignificanceOur findings highlight the ability of biochar to alleviate water competition imbalances and optimize water use in intercropping, providing a new approach for efficient water use in semiarid rain-fed agricultural systems.