UNLABELLED METHODOLOGY/AIMS: This study was conducted to compare the oncologic outcomes of transanal excision and radical resection in pathologic stage I rectal cancer. Ninety-six consecutive patients with stage I rectal cancer treated surgically between January 2000 and December 2009 were enrolled. Thirty-one patients underwent full-thickness transanal excision (TAE) and 65 patients underwent conventional radical resection (RR) (45 low anterior resections and 20 abdominoperineal resections). RESULTS For all 96 study subjects, median follow up was 58.0 months. Patients in the TAE group had smaller tumors and less advanced preoperative stages than patients in the RR group. By multivariate analysis in all study subjects, the presence of lymphovascular invasion (P = 0.014) and a positive resection margin (P = 0.028) were significantly associated with local recurrence free survival, and lymphovascular invasion (P = 0.039) and a positive resection margin (P < 0.001) were significantly associated with disease free survival. CONCLUSION In patients with pathologic stage I rectal cancer, lymphovascular invasion and a positive resection margin were found to be independent risk factors of recurrence. Furthermore, local excision was found to have an adverse effect on disease free survival rate as compared with radical surgery.