To identify the MRI parameters which best predict complete response (CR) to neoadjuvant chemoradiotherapy (CRT) in patients with locally advanced rectal cancer (LARC) and to assess their diagnostic performance. This was a prospective study of pre- and post-CRT MRI and diffusion-weighted imaging (DWI) of 64 patients with LARC who underwent neoadjuvant CRT and subsequent surgery. Histopathological tumour regression grade was the reference standard. Multivariate regression analysis was performed to identify the best MRI predictors of CR to neoadjuvant CRT, and their diagnostic performance was assessed. The study cohort comprised 48 males and 16 females (n = 64), with mean age of 49.48 ± 14.3 years, range of 23-74 years. 11 patients had pathological complete response. The following factors predicted CR on univariate analysis: low initial (pre-CRT) tumour volume on T2 weighted high-resolution (HR) images and DWI, tumour volume-reduction rate (TVRR) of >95% on DWI and CR on post-CRT DWI (ydwiT0) as assessed by the radiologist. However, the best MRI predictors of CR on multivariate regression analysis were CR on post-CRT DWI (ydwiT0) as assessed by the radiologist and TVRR of >95% on DWI, and these parameters had an area under the curve (95% confidence interval) of 0.881 (0.74-1.0) and 0.843 (0.7-0.98), respectively. The sensitivity, specificity, positive-predictive value, negative-predictive value and accuracy of DWI in predicting CR was 81.8%, 94.3%, 75%, 96.1% and 76%; the sensitivity, specificity and accuracy of TVRR of >95% as a predictor of CR was 80%, 84.1% and 64.1%, respectively; however, this difference was not statistically significant. The interobserver agreement was substantial for ydwiT0. Visual assessment of CR on post-CRT DWI and TVRR of >95% on DWI were the best predictors of CR after neoadjuvant CRT in patients with LARC, and the former being more practical can be used in daily practice. In rectal cancer, ydwiT0 as assessed by the radiologist was the best and most practical imaging predictor of CR and scores over standard T2W HR images.