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Liquid biopsy provides minimally invasive and readily obtainable access to tumor-associated biological material in blood or other body fluids. These samples provide important insights into cancer biology, such as primary tumor heterogeneity; real-time tumor evolution; response to therapy, including immunotherapy; and mechanisms of cancer metastasis. Initial biological materials studied were circulating tumor cells and circulating nucleic acids, including circulating tumor DNA and microRNAs; more recently, studies have expanded to investigate extracellular vesicles, such as exosomes, microvesicles, and large oncosomes; tumor-derived circulating endothelial cells; and tumor-educated platelets. Even with an ongoing ambitious investment effort to develop liquid biopsy as an early cancer detection test in asymptomatic individuals, current challenges remain regarding how to access and analyze rare cells and tumor-derived nucleic acids in cancer patients. Technologies and associated bioinformatics tools are continuously evolving to capture these rare materials in an unbiased manner and to analyze them with high confidence. After first presenting recent applications of liquid biopsy, this review discusses aspects affecting the field, including tumor heterogeneity, single-cell analyses, and associated computational tools that will shape the future of liquid biopsy, with resultant opportunities and challenges.