A significant portion of the world’s population does not have access to safe drinking water. This problem is most acute in remote, resource-constrained rural settings in developing countries. Water filtration using activated carbon is one of the important steps in treating contaminated water. Lignocellulosic biomass is generally available in abundance in such locations, such as the African rain forests. Our work is focused on developing a simple method to synthesize activated biochar from locally available materials. The preparation of activated biochar with diammonium hydrogenphosphate (DAP) as the activating agent is explored under N flow and air. The study, carried out with cellulose as a model biomass, provides some insight into the interaction between DAP and biomass, as well as the char forming mechanism. Various characterization techniques such as N physisorption, X-ray photoelectron spectroscopy, scanning electron microscopy, transmission electron microscopy and Raman spectroscopy are utilized to compare the properties between biochar formed under nitrogen and partial oxidative conditions. At a temperature of 450 °C, the loading of DAP over cellulose is systematically varied, and its effect on activation is examined. The activated biochar samples are predominantly microporous in the range of concentrations studied. The interaction of DAP with cellulose is investigated and the nature of bonding of the heteroatoms to the carbonaceous matrix is elucidated. The results indicate that the quality of biochar prepared under partial oxidation condition is comparable to that of biochar prepared under nitrogen, leading to the possibility of an activated biochar production scheme on a small scale in resource-constrained settings.