Purpose: This study set out to determine the impact of a positive circumferential resection margin (CRM)(R1-R2) and pathologic downstaging on local recurrence and survival in patients with borderline resectable orunresectable rectal adenocarcinoma treated with neoadjuvant chemoradiotherapy (CRT).Methods and Materials: A total of 150 patients with locally advanced rectal cancer were treated with long-courseneoadjuvant CRT using low-dose folinic acid and 5-fluorouracil. CRT was followed 6–12 weeks later by surgicalexcision. The CRM rate and incidence, site, and pattern of local and systemic recurrences were recorded. Themedian follow-up was 25 months.Results: The overall median survival was 37 months, with a 5-year overall survival rate of 34%. Of the 150 patients,122 underwent curative resection; 12% had a complete pathologic response, and downstaging to pT1-T2 occurred inan additional 16%. A negative CRM (R0) was achieved in 65% overall (98 of 150). Local recurrence occurred in 10%of those with R0 resection and 62% of those with R1-R2 resections. Distant metastases occurred in 29% of those withR0 resections and 75% of those with R1-R2 resections. The 3-year disease-free and 3-year overall survival rate was9% and 25% and 52% and 64%, respectively, for patients with and without a histologically positive CRM.Conclusion: After 5-fluorouracil–based CRT, a positive CRM predicted for a high risk of subsequent localrecurrence and a 3-year disease-free survival rate of only 9%. For this reason, the CRM should be considereda major prognostic factor and should be validated in future trials as an early alternative clinical endpoint.© 2005 Elsevier Inc.