Liquid biopsies, in particular, analysis of cell-free DNA (cfDNA), have emerged as a promising noninvasive diagnostic approach in oncology. Abnormal distribution of DNA methylation is one of the hallmarks of many cancers and methylation changes occur early during carcinogenesis. Systemic analysis of cfDNA methylation profiles is being developed for cancer early detection, monitoring for minimal residual disease (MRD), predicting treatment response and prognosis, and tracing the tissue origin. This review highlights the advantages and disadvantages of ctDNA profiling for noninvasive diagnosis of early-stage cancers and explores recent advances in the clinical application of ctDNA methylation assays. We also summarize the technologies for ctDNA methylation analysis and provide a brief overview of the bioinformatic approaches for analyzing DNA methylation sequencing data.