Introduction: Total mesorectal excision is the standard treatment for clinical T2 (cT2) rectal cancer; however, this procedure can result in postoperative dysfunction, decreased quality of life, and stoma creation in some patients. We investigated neoadjuvant chemoradiotherapy (nCRT) plus local excision (LE) as an alternative treatment strategy for patients with cT2N0 rectal cancer. Method: Fifty-six patients with cT2N0M0 rectal cancer who exhibited the following characteristics (an anal verge of ≤8 cm, tumor size of 2) or S-1 (tegafur/gimeracil/oteracil; 80 mg/m2). Results: Fifty-five patients (98%) completed nCRT as planned. Histologically, the excision margin was negative in all patients, and four patients with ypT3 disease underwent total mesorectal excision. Recurrence was observed in 15 patients (27%), local recurrence in 7 (13%), and distant recurrence in 10 (18%). The salvage surgery was possible for the local recurrence group. The 5-year disease-free and overall survival rates were 68.4% and 84.9%, respectively. Multivariate analysis showed that only the tumor regression grade (TRG) was an independent risk factor for recurrence (p = 0.025). Although 7 (26%) out of 27 patients with a TRG of 3 or 4 developed local recurrence and 6 (22%) had distant metastasis, 25 patients with a TRG of 1 or 2 did not exhibit local recurrence, and only 1 (4%) experienced distant metastasis. Conclusion: nCRT plus LE may be an alternative treatment for patients with cT2N0 rectal cancer who achieved a TRG of 1 or 2. However, additional treatment was required in patients who achieved a TRG of 3 or 4.