The authors develop a theory of THH and TC of Waldhausen categories and prove the analogues of Waldhausen's theorems for K-theory. They resolve the longstanding confusion about localization sequences in THH and TC, and establish a specialized dévissage theorem. As applications, the authors prove conjectures of Hesselholt and Ausoni-Rognes about localization cofiber sequences surrounding THH(ku), and more generally establish a framework for advancing the Rognes program for studying Waldhausen's chromatic filtration on A(*).