Total neoadjuvant therapy (TNT) has emerged as a promising approach for managing locally advanced rectal cancer (LARC), aiming to enhance resectability, increase pathological complete response (pCR), improve treatment compliance, survival, and sphincter preservation. This study compares the clinical outcomes of TNT, with either induction or consolidation chemotherapy, to those of the standard chemoradiotherapy (CRT). In this retrospective multi-institutional study, patients with stage II-III LARC who underwent CRT or TNT from seven oncology centers between 2021 and 2024 were retrospectively analyzed. The TNT group was categorized into induction or consolidation groups based on the sequence of chemotherapy and radiotherapy. Clinical and pathological data and treatment outcomes, including pCR, event-free survival (EFS), and overall survival (OS), were analyzed. Among the 276 patients, 105 received CRT and 171 underwent TNT. The TNT group showed significantly higher pCR (21.8% vs. 2.9%, p < 0.001) and lower lymphatic (26.3% vs. 42.6%, p = 0.009), vascular (15.8% vs. 32.7%, p = 0.002), and perineural invasion rates (20.3% vs. 37.6%, p = 0.003). Furthermore, 16.9% of TNT patients opted for non-operative management (NOM), compared to 0.9% in the CRT group (p < 0.001). The median interval between the end of radiotherapy and surgery was longer in the TNT group (17.6 weeks vs. 8.8 weeks, p < 0.001). The 3-year EFS was 58.3% for CRT and 71.1% for TNT (p = 0.06). TNT is associated with higher pCR, lower lymphatic and vascular invasion rates, and higher rates of NOM compared to CRT. This supports the use of TNT as a viable treatment strategy for LARC, offering potential benefits in quality of life.