The management of locally advanced rectal cancer (LARC) relies on a multimodal approach. Neither instrumental work-up nor molecular biomarkers are currently available to identify a risk-adapted strategy. We aim to investigate the role of circulating tumor DNA (ctDNA) and its clearance at different timepoints during chemo-radiotherapy (CRT) and correlate them with clinical outcomes. Between November 2014 and November 2019, we conducted a monocentric prospective observational study enrolling consecutive patients with LARC managed with neoadjuvant standard CRT (capecitabine and concomitant pelvic long-course radiotherapy), followed by consolidation capecitabine in selected cases and surgery. Blood samples for ctDNA were obtained at pre-planned timepoints. We evaluated the correlation of baseline variant allele frequency (VAF) with pathologic complete response (pCR) down-staging, node regression (pN0), event-free survival (EFS), and overall survival (OS). Among 112 screened patients, 61 were enrolled. In all, 38 (62%) had a positive ctDNA at baseline with VAF > 0 and 23 had negative ctDNA (VAF = 0). Among patients with negative ctDNA, 30% had a complete response, while only 13% of positive ctDNA patients had pCR [odds ratio (OR) 0.35 (95% confidence interval (CI): 0.10-1.26), p = 0.11]. Similarly, 96% and 74% of pN0 were observed among negative and positive ctDNA patients, respectively [OR 0.13 (95% CI: 0.02-1.07), p = 0.058]. The presence of a baseline VAF > 0 was associated with a trend toward a lower EFS compared with VAF = 0 patients [hazard ratio (HR) = 2.30, 95% CI: 0.63-8.36, p = 0.21]. Within the limitations of small sample size, no difference in OS was observed according to the baseline ctDNA status (HR = 1.18, 95% CI: 0.35-4.06, p = 0.79). Within the limitations of a reduced number of patients, patients with baseline negative ctDNA seem to show a higher probability of pN0 status and a trend toward improved EFS. Prospective translational studies are required to define the role of ctDNA analysis in the multimodal treatment of LARC.