Cell-free RNA (cfRNA) analysis could allow non-invasive tumor gene expression profiling and monitoring of cancers. Here, we describe RARE-Seq (Random priming & Affinity capture of cell-free RNA fragments for Enrichment analysis by Sequencing), a novel cfRNA profiling platform optimized for the simultaneous noninvasive detection of tissue-derived transcripts and associated somatic mutations. We show that platelet contamination can substantially confound cfRNA analyses and describe a framework to overcome it. In analytical validations, we find RARE-Seq to be ~50-fold more sensitive for detecting tumor-derived transcriptomes than whole transcriptome strategies, corresponding to a limit of detection of 0.05%. To explore its clinical utility, we profiled 437 plasma samples from 369 individuals with cancer or non-malignant conditions and controls. Detection of non-small cell lung cancer (NSCLC) expression signatures in cfRNA increased with stage (I: 6/20, 30%; II: 5/8, 62%; III: 10/15, 67%; IV: 80/96, 83% sensitivity at 95% specificity). When applied to EGFR mutant NSCLC patients who developed resistance to tyrosine kinase inhibitors, RARE-Seq detected both histologic transformation and mutation-based resistance mechanisms. Furthermore, RARE-Seq detected other solid tumor types and identified tissue of origin with high accuracy (89%). Lastly, we demonstrate the potential utility of RARE-Seq for assessing benign pulmonary conditions and tracking response to mRNA vaccines. These results highlight the potential value of ultrasensitive cfRNA analysis and provide proof-of-concept for multiple clinical applications.