Circulating cell-free DNA (cfDNA) is DNA released from necrotic or apoptotic cells into the bloodstream. While both healthy cells and cancer cells release cfDNA, tumors are associated with higher levels of tumor-derived circulating cell-free DNA (ctDNA) detectable in blood. Absolute levels of ctDNA and its genetic mutations and epigenetic changes show promise as potentially useful biomarkers of tumor biology, progression, and response to therapy. Moreover, studies have demonstrated the discriminative accuracy of ctDNA levels for diagnosis of gastrointestinal cancer compared with benign inflammatory diseases. Therefore, ctDNA detected in blood offers a minimally invasive and easily repeated “liquid biopsy” of cancer, facilitating real-time dynamic analysis of tumor behavior that could revolutionize both clinical and research practices in oncology. In this review, we provide a critical summary of the evidence for the utility of ctDNA as a diagnostic and prognostic biomarker in gastrointestinal malignancies.