Liquid biopsy is a new diagnostic concept that provides important information for monitoring and identifying tumor genomes in body fluid samples. Detection of tumor origin biomolecules like circulating tumor cells (CTCs), circulating tumor specific nucleic acids (circulating tumor DNA (ctDNA), circulating tumor RNA (ctRNA), microRNAs (miRNAs), long non-coding RNAs (lnRNAs)), exosomes, autoantibodies in blood, saliva, stool, urine, etc. enables cancer screening, early stage diagnosis and evaluation of therapy response through minimally invasive means. From reliance on painful and hazardous tissue biopsies or imaging depending on sophisticated equipment, cancer management schemes are witnessing a rapid evolution towards minimally invasive yet highly sensitive liquid biopsy-based tools. Clinical application of liquid biopsy is already paving the way for precision theranostics and personalized medicine. This is achieved especially by enabling repeated sampling, which in turn provides a more comprehensive molecular profile of tumors. On the other hand, integration with novel miniaturized platforms, engineered nanomaterials, as well as electrochemical detection has led to the development of low-cost and simple platforms suited for point-of-care applications. Herein, we provide a comprehensive overview of the biogenesis, significance and potential role of four widely known biomarkers (CTCs, ctDNA, miRNA and exosomes) in cancer diagnostics and therapeutics. Furthermore, we provide a detailed discussion of the inherent biological and technical challenges associated with currently available methods and the possible pathways to overcome these challenges. The recent advances in the application of a wide range of nanomaterials in detecting these biomarkers are also highlighted.