Minimally invasive approaches to detect residual disease after surgery are needed to identify patients with cancer who are at risk for metastatic relapse. Circulating tumour DNA (ctDNA) holds promise as a biomarker for molecular residual disease and relapse. We evaluated outcomes in 581 patients who had undergone surgery and were evaluable for ctDNA from a randomized phase III trial of adjuvant atezolizumab versus observation in operable urothelial cancer. This trial did not reach its efficacy end point in the intention-to-treat population. Here we show that ctDNA testing at the start of therapy (cycle 1 day 1) identified 214 (37%) patients who were positive for ctDNA and who had poor prognosis (observation arm hazard ratio = 6.3 (95% confidence interval: 4.45-8.92); P < 0.0001). Notably, patients who were positive for ctDNA had improved disease-free survival and overall survival in the atezolizumab arm versus the observation arm (disease-free survival hazard ratio = 0.58 (95% confidence interval: 0.43-0.79); P = 0.0024, overall survival hazard ratio = 0.59 (95% confidence interval: 0.41-0.86)). No difference in disease-free survival or overall survival between treatment arms was noted for patients who were negative for ctDNA. The rate of ctDNA clearance at week 6 was higher in the atezolizumab arm (18%) than in the observation arm (4%) (P = 0.0204). Transcriptomic analysis of tumours from patients who were positive for ctDNA revealed higher expression levels of cell-cycle and keratin genes. For patients who were positive for ctDNA and who were treated with atezolizumab, non-relapse was associated with immune response signatures and basal-squamous gene features, whereas relapse was associated with angiogenesis and fibroblast TGFβ signatures. These data suggest that adjuvant atezolizumab may be associated with improved outcomes compared with observation in patients who are positive for ctDNA and who are at a high risk of relapse. These findings, if validated in other settings, would shift approaches to postoperative cancer care.