Many protein-coding genes in higher eukaryotes can produce circular RNAs (circRNAs) through back-splicing of exons. CircRNAs differ from mRNAs in their production, structure and turnover and thereby have unique cellular functions and potential biomedical applications. In this Review, I discuss recent progress in our understanding of the biogenesis of circRNAs and the regulation of their abundance and of their biological functions, including in transcription and splicing, sequestering or scaffolding of macromolecules to interfere with microRNA activities or signalling pathways, and serving as templates for translation. I further discuss the emerging roles of circRNAs in regulating immune responses and cell proliferation, and the possibilities of applying circRNA technologies in biomedical research.