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Aim: The aim of this work was to evaluate whether normalized carcinoembryonic antigen (CEA) following neoadjuvant chemoradiation predicts the prognosis following curative resection in locally advanced rectal cancer. Method: Patients who underwent neoadjuvant chemoradiation and curative resection for locally advanced rectal cancer between 2010 and 2015 were divided into three groups: Group A (n = 119, normal‐to‐normal): normal CEA before and after neoadjuvant chemoradiation; Group B (n = 37, high‐to‐normal): elevated CEA before and normal CEA after neoadjuvant chemoradiation; Group C (n = 36, high‐to‐high): elevated CEA before and after neoadjuvant chemoradiation. Overall and disease‐free survival were compared. Univariate and multivariate analyses identified potential predictors for recurrence. Results: One hundred and ninety two patients [median age 59 years (range 31–87), 65.1% male] were identified: 54.7% had low rectal cancer: 12.5% were clinical stage T4 and 70.3% were clinically node positive; 21.9% achieved complete pathological response; 24.5% had abdominoperineal resection (APR); and 70.3% underwent adjuvant chemotherapy following curative resection. Significantly more patients in Group C underwent APR (p = 0.0209), had advanced pathological T stage (P = 0.0065) and a higher prevalence of perineural invasion (p = 0.0042). Overall and disease‐free survival were significantly higher for Group A than for Group C [hazard ratio (HR) = 4.32, 95% CI = 1.66–11.21, p = 0.0026 and HR=2.68, 95% CI = 1.33–5.40, p = 0.0057, respectively]. No significant difference was noted between Groups A and B for overall (p = 0.0591) or disease‐free (p = 0.2834) survival. Another risk factor associated with recurrence and death was clinical T4 stage; nodal positivity was a risk factor only for recurrence. Conclusion: Elevated CEA after neoadjuvant chemoradiation and clinical stage T4 disease were unfavourable predictors for overall and disease‐free survival. Normalized CEA during neoadjuvant chemoradiation may serve as a prognosticator, although pretreatment CEA may significantly affect survival. [ABSTRACT FROM AUTHOR]