Cancer metastasis is the main cause of cancer-related death, and dissemination of tumor cells through the blood circulation is an important intermediate step that also exemplifies the switch from localized to systemic disease. Early detection and characterization of circulating tumor cells (CTCs) is therefore important as a general strategy to monitor and prevent the development of overt metastatic disease. Furthermore, sequential analysis of CTCs can provide clinically relevant information on the effectiveness and progression of systemic therapies (e.g., chemo-, hormonal, or targeted therapies with antibodies or small inhibitors). Although many advances have been made regarding the detection and molecular characterization of CTCs, several challenges still exist that limit the current use of this important diagnostic approach. In this review, we discuss the biology of tumor cell dissemination, technical advances, as well as the challenges and potential clinical implications of CTC detection and characterization.