Several trials performed in the United States and Europe have demonstrated the efficacy of UFT (uracil and tegafur in a 4:1 molar combination) with oral leucovorin in the treatment of several tumor types, but particularly for advanced colorectal cancer. Phase III studies are under way in the United States to determine whether the combination of UFT with oral leucovorin is as effective as standard treatment, not only in the advanced setting but also in the adjuvant arena as well. This study is an open-label phase I trial to determine the safety of UFT and leucovorin, both given orally three times daily during concurrent fixed doses of pelvic radiotherapy, and to determine the safety of UFT plus oral leucovorin administration after pelvic radiotherapy, chemotherapy, and surgery. Standard treatment at M. D. Anderson Cancer Center for patients with T3, T4, and/ or > N1 rectal carcinoma is a preoperative continuous-infusion of fluorouracil (5-FU) with radiation therapy followed by four courses of 5-FU/ leucovorin postoperatively. Data suggest that UFT and leucovorin may offer a well-tolerated, fully oral treatment option that could be more convenient for patients. The trial presented herein provides data relative to the feasibility of preoperative oral UFT and leucovorin chemotherapy given during radiation therapy, and oral UFT and leucovorin chemotherapy following surgery in the treatment of patients with rectal cancer. This study is anticipated to serve as a pilot to develop an investigational treatment arm for a randomized trial of preoperative treatment of patients with rectal cancer.