PURPOSE:This study examines the prognostic significance of circumferential margin involvement by tumor in resected specimens after potentially curative rectal cancer surgery.METHODS:During an eight‐year period, all patients with rectal cancer were prospectively audited. For tumors of the middle and lower thirds of the rectum, a total mesorectal excision was performed; for tumors of the upper third, mesorectal excision proceeded at least 5 cm distal to the primary tumor. Resected specimens were subjected to careful histologic assessment, and patients undergoing curative procedures were entered into a surveillance program to detect both local and distant recurrence.RESULTS:Of 218 patients in the cohort, 9 had no resection, 14 underwent local excision, 1 had pre‐operative radiotherapy, and 42 patients (20 percent) had palliative resections and were excluded from further analysis. This left 152 patients having a curative resection, of whom 20 (13 percent) had tumor within 1 mm of the circumferential margin. After follow‐up until death or a median period of 41 months, recurrent disease was seen in 24 percent of patients with a negative margin and 50 percent with a positive margin. Both disease‐free survival and mortality were significantly related to margin involvement (log‐rank,P=0.01 andP=0.005, respectively). Local recurrence, however, was not significantly different in the two groups (11 and 15 percent, respectively; log‐rank,P=0.38).CONCLUSIONS:When a mesorectal excision is performed, circumferential margin involvement is more an indicator of advanced disease than inadequate local surgery. Patients with an involved margin may die from distant disease before local recurrence becomes apparent.