Aberrant DNA methylation is a hallmark of malignancies and can be detected in circulating cell-free DNA (ccfDNA) in bodily fluids, i.e. blood plasma, serum and urine. The availability of technologies that allow for an accurate and sensitive quantification of ccfDNA DNA methylation enables the precise monitoring of dynamic pathologic processes and pharmacodynamics. Recently, the first ccfDNA methylation biomarker SEPT9 received clearance by the US Food and Drug Administration (FDA) with its intended use for blood-based colorectal cancer screening. In this review, the application of ccfDNA methylation as a biomarker for diagnosis, screening, early detection, prognosis, molecular staging, therapy response monitoring, and recurrence monitoring is discussed. Special emphasis is placed on the potential and the limitations of methylation biomarkers for the clinical management of prostate, lung, colorectal, bladder, and head and neck cancer. Current and future applications of the validated methylation biomarkers SHOX2 and SEPT9 are highlighted. Additional applications of methylation biomarkers in ccfDNA beyond cancer are discussed briefly. Furthermore, preanalytical and analytical procedures are discussed with regard to a possible implementation of ccfDNA methylation biomarkers into clinical laboratories.