Out of all planets in the solar system besides Earth, life on Mars seems most likely, even though the chance is small, probably less than 1%. Astronomers have speculated about the possibility ever since they saw "canals" on Mars with early telescopes, as well as glimpsing the presence of ice caps. The flurry of excitement that Mars' "canals" generated upon their discovery gave birth to the popular culture notion of Martians. It eventually became obvious that these canals were natural formations, but the speculation around life on Mars continued anyway.
The direct search for life on Mars began in the 1970s, when the Viking landers were sent there, with their primary mission being the analysis of Martian soil for microorganisms. They found none, including no organic molecules at all. A more recent lander, Phoenix, arrived on Mars in 2008 with more sensitive equipment and repeated the tests, again finding nothing. Extensive testing will likely have to wait until the human visitation and long-term colonization of Mars, which might not happen until 2050 or longer.
Even though no surface life on Mars was detected in these missions, these findings are not definitive. Some scientists used similar techniques to test for life in the McMurdo Dry Valleys of Antarctica, which are known to possess microorganisms, and they came up negative, suggesting that different approaches will be required to fully verify the Viking and Phoenix results. Regardless, these tests would have missed life beneath the surface. In 2007, it was calculated that DNA or RNA based life would not be able to survive for long less than 7.5 meters (25 ft) below the surface due to the high influx of cosmic rays. Therefore, the most likely location of life on Mars is still unchecked.
The most definitive piece of evidence that we currently have that there may indeed be subsurface Martian microorganisms is the observation of methane in the atmosphere of Mars. On Earth, methane almost always comes from a biological source, but other processes can create methane -- usually volcanism or hydrothermic activity. A few other rare nonbiological processes can create methane, such as serpentinization. The presence of methane in the Martian atmosphere indicates that something is producing it continually, as methane breaks down quickly in the Martian sun. Mars' lack of volcanism or hydrothermal geysers makes it unlikely that methane was generated in this way. Thus, it seems like the source is either some rare nonbiological process or subsurface methanogenic bacteria.
In the end, the answer is that we are still uncertain.
Michael is a longtime WiseGEEK contributor who specializes in topics relating to paleontology, physics, biology, astronomy, chemistry, and futurism. In addition to being an avid blogger, Michael is particularly passionate about stem cell research, regenerative medicine, and life extension therapies. He has also worked for the Methuselah Foundation, the Singularity Institute for Artificial Intelligence, and the Lifeboat Foundation.