Tumor-specific, circulating cell-free DNA in liquid biopsies is a promising source of biomarkers for minimally invasive serial monitoring of treatment responses in cancer management. We will review the current understanding of the origin of circulating cell-free DNA and different forms of DNA release (including various types of cell death and active secretion processes) and clearance routes. The dynamics of extracellular DNA in blood during therapy and the role of circulating DNA in pathophysiological processes (tumor-associated inflammation, NETosis, and pre-metastatic niche development) provide insights into the mechanisms that contribute to tumor development and metastases formation. Better knowledge of circulating tumor-specific cell-free DNA could facilitate the development of new therapeutic and diagnostic options for cancer management.