There has been increasing interest in whether a watch-and-wait strategy can be pursued instead of routine surgery in selected rectal cancer patients who have a clinical complete response (cCR) after chemoradiation. The watch-and-wait approach could potentially reduce treatment-related toxicity in selected rectal cancer patients. A large study from Brazil and a prospective trial from the Netherlands appear to support this approach, although multiple other studies have raised concerns about the high rate of local recurrence with this strategy. This article reviews current evidence in support of a watch-and-wait approach to rectal cancer management, and discusses the challenges and limitations of this approach. Among these are the facts that current methods of assessing tumor response have limited accuracy, and that a cCR does not necessarily imply pathologic complete response. Careful patient selection and systematic methods of response assessment and follow-up will be critical to the success of nonoperative approaches. Based on the available evidence, ideally a watch-and-wait approach for patients with rectal cancer should be pursued within the context of a prospective clinical trial.