When you create a new character it gets a default character avatar. You can change that by going to the Avatar option on the character screen.
In the Avatar tool you have several options.
Upload your own image. A square image is best.
Select from the large selection of premade avatars in the select tab.
Pro Subscriber only feature: Character Avatar Creator. You can generate a new avatar using simple settings and writing a description of your character. Once you are happy with the results just save the avatar.
Once you've found that perfect look you can save the image you want as your new avatar. After choosing an avatar you will see it updated in the header of your character sheet. Additionally, you can change up the token style for your new avatar by using the Token tool on the character screen.
Character Avatars also appear anywhere your character goes. In campaigns, they are shown in the Sheets section, on character cards in the Campaign Lobby and are available as tokens within the campaign.