The competitive endogenous RNA (ceRNA) hypothesis proposes that transcripts with shared microRNA (miRNA) binding sites compete for post-transcriptional control. This hypothesis has gained substantial attention as a unifying function for long non-coding RNAs, pseudogene transcripts and circular RNAs, as well as an alternative function for messenger RNAs. Empirical evidence supporting the hypothesis is accumulating but not without attracting scepticism. Recent studies that model transcriptome-wide binding-site abundance suggest that physiological changes in expression of most individual transcripts will not compromise miRNA activity. In this Review, we critically evaluate the evidence for and against the ceRNA hypothesis to assess the impact of endogenous miRNA-sponge interactions.