Background The aim of this study was to determine the impact of the circumferential resection margin on the outcomes of patients with rectal cancer undergoing total mesorectal excision. Methods Medical records from July 2004 to June 2008 were prospectively reviewed, and 348 patients who underwent potentially curative surgery for rectal cancer were identified. The influence of the circumferential resection margin on local recurrence, distant metastasis, and 5-year cancer-specific survival was assessed. Results Of 348 patients, 13 (3.7%) had positive circumferential resection margins. During a median follow-up period of 58.0 months, 8 patients (2.3%) had local recurrence and 53 (15.2%) developed distant metastases. Local recurrence rates and distant metastasis rates in patients with positive circumferential resection margins were 15.4% and 61.5%, respectively, significantly higher than in those with negative circumferential resection margins (1.8% and 13.4%, respectively) (P <.001). The 5-year cancer-specific survival rates were 75.8% and 0% for patients with tumors having negative and positive circumferential resection margins, respectively (P <.001). Conclusions A circumferential resection margin of ≤1 mm adversely affects cancer-specific survival, local recurrence, and distant metastasis.