Environmental DNA (eDNA) is increasingly used to produce high-quality data on the distribution of organisms. I show how eDNA analysis can greatly assist biodiversity conservation, including 1) the early detection of alien invasive species; 2) the detection of rare and secretive organisms; 3) the identification of interspecific interactions; 4) the assessment of long-term trends and of the underlying drivers and 5) the evaluation of impacts of climate change on communities. Furthermore, I highlight key issues and limitations that must be taken into account to produce reliable eDNA data, and propose strategies that can be adopted to limit these issues. Finally, I discuss new avenues in the use of eDNA for biodiversity analysis, including approaches that can enable an exhaustive assessment of entire communities, the analysis of functional diversity, and the integration of eDNA-based biodiversity data into adaptive management strategies.