Purpose: To establish the feasibility of concurrent radiotherapy and capecitabine and define the maximum-tolerated dose (MTD) in patients with rectal cancer. Patients and Methods: Thirty-six patients with rectal cancer received treatment in the adjuvant, neoadjuvant, or palliative setting with a total irradiation dose of 50.4 Gy with 1.8 Gy/d in approximately 6 weeks. Capecitabine was administered at escalating doses from 250 to 1,250 mg/m2 bid (including weekends) for the duration of radiotherapy. The MTD was defined when two or more patients in a cohort of three or six patients experienced dose-limiting toxicities. Results: Dose-limiting grade 3 hand-foot syndrome was observed in two of six patients treated at a capecitabine dose of 1,000 mg/m2 bid. Other toxicities were generally rare and/or mild, with only one case of non-dose-limiting grade 3 diarrhea and a single patient with grade 3 skin toxicity. Myelosuppression consisted mainly of leukocytopenia, with a maximum severity of grade 2. Thus, a dosage of 825 mg/m2 bid is the recommended dose level for further evaluation. One pathologic complete remission of a T3N1 tumor and nine partial remissions were observed in 10 patients treated in the neoadjuvant setting. Conclusion: The recommended dose for phase II evaluation is capecitabine 825 mg/m2 bid, administered without break during a conventional radiotherapy period of about 6 weeks. This combined-modality approach proved to be a feasible and well-tolerated treatment option with promising preliminary efficacy results in rectal cancer.