A better understanding of the interfacial transition zone (ITZ) in biochar-augmented carbon-negative cementitious materials can facilitate their potential applications. This study illustrated the key chemical and mechanical features of such a region in Portland cement using backscattered electron microscopy-energy dispersive X-ray analysis (BSEM-EDX), nano-indentation, and X-ray computed tomography (X-CT). It was found that a significant ‘wall effect’ was identified at the side-edge of biochar, where the degree of hydration and the porosity significantly increased. The biochar was integrated into the hardened cement matrix via a layer of Ca-rich hydration products mainly composed of AFm phases, CH and C–S–H gels. Regarding the mechanical behaviour, the biochar showed a typical viscous-elastic (VE) deformation mode at the nano/micro scale, whereas the hardened cement was a typical plastic-elastic (PE) material. Therefore, the value of the hardness of biochar was not accurate under limited plastic deformation. The distinct differences in deformation resulted in the largest residual deformation (i.e., plasticity) of the hardened cement after indentation when compared to ITZ and biochar regions, whereas the ITZ maintained a lower value due to well connection with biochar. These microstructural characteristics partially explained the higher compressive strength of biochar-cement composites than previously expected.