The clinical course of 40 patients undergoing conservative surgical excision and 26 patients undergoing local excision and postoperative radiation therapy of rectal carcinoma was reviewed. Surgical procedures were transanal excision (55 patients), Kraske procedure (ten patients), and fulguration (one patient). The five-year actuarial survival, disease-free survival, and local control of all 66 patients were 70%, 77%, and 63%, respectively. For patients undergoing local excision alone, the prognostic features of lesion size greater than 3 cm, poorly differentiated histology, invasion into muscularis propria or deeper, moderate to marked stromal fibrosis, vascular or lymph vessel invasion, fragmented resection, and positive resection margins were associated with a local failure rate of 20% or greater. Of the 26 patients receiving postoperative radiation therapy, four patients have developed local failure. For subgroups of patients with small rectal carcinomas confined to the mucosa, local excision may be a reasonable alternative to abdominoperineal resection. For tumors with deeper invasion but limited to the bowel wall, local excision plus pelvic irradiation can be offered to preserve anorectal function.