Background: Liquid biopsy (LB) analysis using (ctDNA)/cell-free DNA (cfDNA) is an emerging alternative to tissue profiling in (NSCLC). LB is used to guide treatment decisions, detect resistance mechanisms, and predicts responses, and, therefore, outcomes. This systematic review and meta-analysis evaluated the impact of LB quantification on clinical outcomes in molecularly altered advanced NSCLC undergoing targeted therapies. Methods: We searched Embase, MEDLINE, PubMed, and Cochrane Database, between 1 January 2020 and 31 August 2022. The primary outcome was progression-free survival (PFS). Secondary outcomes included overall survival (OS), objective response rate (ORR), sensitivity, and specificity. Age stratification was performed based on the mean age of the individual study population. The quality of studies was assessed using the Newcastle–Ottawa Scale (NOS). Results: A total of 27 studies (3419 patients) were included in the analysis. Association of baseline ctDNA with PFS was reported in 11 studies (1359 patients), while that of dynamic changes with PFS was reported in 16 studies (1659 patients). Baseline ctDNA-negative patients had a trend towards improved PFS (pooled hazard ratio [pHR] = 1.35; 95%CI: 0.83–1.87; p < 0.001; I2 = 96%) than ctDNA-positive patients. Early reduction/clearance of ctDNA levels after treatment was related to improved PFS (pHR = 2.71; 95%CI: 1.85–3.65; I2 = 89.4%) compared to those with no reduction/persistence in ctDNA levels. The sensitivity analysis based on study quality (NOS) demonstrated improved PFS only for good [pHR = 1.95; 95%CI: 1.52–2.38] and fair [pHR = 1.99; 95%CI: 1.09–2.89] quality studies, but not for poor quality studies. There was, however, a high level of heterogeneity (I2 = 89.4%) along with significant publication bias in our analysis. Conclusions: This large systematic review, despite heterogeneity, found that baseline negative ctDNA levels and early reduction in ctDNA following treatment could be strong prognostic markers for PFS and OS in patients undergoing targeted therapies for advanced NSCLC. Future randomised clinical trials should incorporate serial ctDNA monitoring to further establish the clinical utility in advanced NSCLC management.