Plasma cell-free DNA (cfDNA) are small molecules generated through a non-random fragmentation procedure. Despite commendable translational values in cancer liquid biopsy, however, the biology of cfDNA, especially the principles of cfDNA fragmentation, remains largely elusive. Through orientation-aware analyses of cfDNA fragmentation patterns against the nucleosome structure and integration with multidimensional functional genomics data, here we report a DNA methylation - nuclease preference - cutting end - size distribution axis, demonstrating the role of DNA methylation as a functional molecular regulator of cfDNA fragmentation. Hence, low-level DNA methylation could increase nucleosome accessibility and alter the cutting activities of nucleases during DNA fragmentation, which further leads to variation in cutting sites and size distribution of cfDNA. We further develop a cfDNA ending preference-based metric for cancer diagnosis, whose performance has been validated by multiple pan-cancer datasets. Our work sheds light on the molecular basis of cfDNA fragmentation towards broader applications in cancer liquid biopsy.© 2023. The Author(s).