Purpose: Methylation in IKZF1 and BCAT1 are common events in colorectal cancer (CRC). They are often detected in blood as circulating tumor DNA (ctDNA) at diagnosis and disappear after surgery in most CRC patients. A prospective study was conducted to determine the relationship between detection of these markers following surgery and risk for residual disease and for recurrence. Methods: ctDNA status with methylated BCAT1 and IKZF1 was determined within 12 months of surgical resection of CRC, and was related to presence of or risk for residual disease (margins involved, metastases present or nature of node involvement), and to recurrence-free survival. Results: Blood was collected from 172 CRC patients after surgery and 28 (16%) were ctDNA positive. Recurrence was diagnosed in 23 of the 138 with clinical follow-up after surgery (median follow-up 23.3 months, IQR 14.3–29.5). Multivariate modeling indicated that features suggestive of residual disease were an independent predictor of post-surgery ctDNA status: cases with any of three features (close resection margins, apical node involved, or distant metastases) were 5.3 times (95% CI 1.5–18.4, p = 0.008) more likely to be ctDNA positive. Multivariate analysis showed that post-surgery ctDNA positivity was independently associated with an increased risk of recurrence (HR 3.8, 1.5–9.5, p = 0.004). Conclusions: CRC cases positive for methylated ctDNA after surgery are at increased risk of residual disease and subsequently recurrence. This could have implications for guiding recommendations for adjuvant therapy and surveillance strategies. Randomized studies are now indicated to determine if monitoring cases with these biomarkers leads to survival benefit.