Over the past few decades, RNA sequencing has significantly progressed, becoming a paramount approach for transcriptome profiling. The revolution from bulk RNA sequencing to single-molecular, single-cell and spatial transcriptome approaches has enabled increasingly accurate, individual cell resolution incorporated with spatial information. Cancer, a major malignant and heterogeneous lethal disease, remains an enormous challenge in medical research and clinical treatment. As a vital tool, RNA sequencing has been utilized in many aspects of cancer research and therapy, including biomarker discovery and characterization of cancer heterogeneity and evolution, drug resistance, cancer immune microenvironment and immunotherapy, cancer neoantigens and so on. In this review, the latest studies on RNA sequencing technology and their applications in cancer are summarized, and future challenges and opportunities for RNA sequencing technology in cancer applications are discussed.