To investigate whether circulating tumor DNA (ctDNA) assessment in patients with muscle-invasive bladder cancer predicts treatment response and provides early detection of metastatic disease. We present full follow-up results (median follow-up: 68 months) from a previously described cohort of 68 neoadjuvant chemotherapy (NAC)-treated patients who underwent longitudinal ctDNA testing (712 plasma samples). In addition, we performed ctDNA evaluation of 153 plasma samples collected before and after radical cystectomy (RC) in a separate cohort of 102 NAC-naïve patients (median follow-up: 72 months). Total RNA sequencing of tumors was performed to investigate biological characteristics of ctDNA shedding tumors. Assessment of ctDNA after RC identified metastatic relapse with a sensitivity of 94% and specificity of 98% using the expanded follow-up data for the NAC-treated patients. ctDNA dynamics during NAC was independently associated with patient outcomes when adjusted for pathologic downstaging (HR = 4.7; P = 0.029). For the NAC-naïve patients, ctDNA was a prognostic predictor before (HR = 3.4; P = 0.0005) and after RC (HR = 17.8; P = 0.0002). No statistically significant difference in recurrence-free survival for patients without detectable ctDNA at diagnosis was observed between the cohorts. Baseline ctDNA positivity was associated with the Basal/Squamous (Ba/Sq) subtype and enrichment of epithelial-to-mesenchymal transition and cell cycle-associated gene sets. ctDNA is prognostic in NAC-treated and NAC-naïve patients with more than 5 years follow-up and outperforms pathologic downstaging in predicting treatment efficacy. Patients without detectable ctDNA at diagnosis may benefit significantly less from NAC, but additional studies are needed.