Locally advanced rectal adenocarcinoma is treated by combined-modality therapy, which consists of surgery, chemotherapy, and radiation therapy. A series of randomized trials established a preferred treatment sequence of preoperative radiation therapy and 5-fluorouracil(5-FU)-based chemotherapy, total mesorectal excision, and adjuvant 5-FU-based chemotherapy for patients with stage II/III disease. Capecitabine is an oral prodrug of 5-FU that has potential advantages compared with intravenous 5-FU, including ease of administration and potentially increased therapeutic effect. Capecitabine is converted by a 3-step enzymatic process; the last step involves the enzyme thymidine phosphorylase, which is overexpressed in tumor tissues and is stimulated by concurrent radiation therapy. Over the past 5 years, several phase I/II trials of capecitabine-based therapy were reported. This review discusses the evolution of combined-modality therapy for rectal cancer with specific attention given to the use of capecitabine in conjunction with radiation therapy.