Anticancer drug development is a costly and protracted activity, and failure at late phases of clinical testing is common. We have previously proposed the Pharmacological Audit Trail (PhAT) intended to improve the efficiency of drug development, with a focus on the use of tumour tissue-based biomarkers. Blood-based 'liquid biopsy' approaches, such as targeted or whole-genome sequencing studies of plasma circulating cell-free tumour DNA (ctDNA) and circulating tumour cells (CTCs), are of increasing relevance to this drug development paradigm. Liquid biopsy assays can provide quantitative and qualitative data on prognostic, predictive, pharmacodynamic and clinical response biomarkers, and can also enable the characterization of disease evolution and resistance mechanisms. In this Perspective, we examine the promise of integrating liquid biopsy analyses into the PhAT, focusing on the current evidence, advances, limitations and challenges. We emphasize the continued importance of analytical validation and clinical qualification of circulating tumour biomarkers through prospective clinical trials.