In recent years, the introduction of new molecular techniques in experimental and clinical settings has allowed researchers and clinicians to propose circulating-tumor DNA (ctDNA) analysis and liquid biopsy as novel promising strategies for the early diagnosis of cancer and for the definition of patients' prognosis. It was widely demonstrated that through the non-invasive analysis of ctDNA, it is possible to identify and characterize the mutational status of tumors while avoiding invasive diagnostic strategies. Although a number of studies on ctDNA in patients' samples significantly contributed to the improvement of oncology practice, some investigations generated conflicting data about the diagnostic and prognostic significance of ctDNA. Hence, to highlight the relevant achievements obtained so far in this field, a clearer description of the current methodologies used, as well as the obtained results, are strongly needed. On these bases, this review discusses the most relevant studies on ctDNA analysis in cancer, as well as the future directions and applications of liquid biopsy. In particular, special attention was paid to the early diagnosis of primary cancer, to the diagnosis of tumors with an unknown primary location, and finally to the prognosis of cancer patients. Furthermore, the current limitations of ctDNA-based approaches and possible strategies to overcome these limitations are presented.