Circular RNAs (circRNAs) are covalently closed, endogenous biomolecules in eukaryotes with tissue-specific and cell-specific expression patterns, whose biogenesis is regulated by specific cis-acting elements and trans-acting factors. Some circRNAs are abundant and evolutionarily conserved, and many circRNAs exert important biological functions by acting as microRNA or protein inhibitors (‘sponges’), by regulating protein function or by being translated themselves. Furthermore, circRNAs have been implicated in diseases such as diabetes mellitus, neurological disorders, cardiovascular diseases and cancer. Although the circular nature of these transcripts makes their detection, quantification and functional characterization challenging, recent advances in high-throughput RNA sequencing and circRNA-specific computational tools have driven the development of state-of-the-art approaches for their identification, and novel approaches to functional characterization are emerging.