This is a randomized, multicenter study. Patients are randomized to 1 of 4 treatment arms. Arm I: Patients receive fluorouracil IV continuously and undergo radiotherapy once daily 5 days a week for 5-6 weeks. Arm II: Patients receive fluorouracil and undergo radiotherapy as in arm I. Patients also receive oxaliplatin IV over 1 hour once weekly for 5 weeks. Arm III: Patients receive oral capecitabine twice daily and undergo radiotherapy once daily 5 days a week for 5-6 weeks. Arm IV: Patients receive capecitabine and undergo radiotherapy as in arm III. Patients also receive oxaliplatin as in arm II. Within 6-8 weeks after the completion of chemoradiotherapy, patients with responding or stable disease undergo surgery. Patients with progressive disease are treated at the discretion of the investigator and continue to be followed.

Diagnosis of adenocarcinoma of the rectum Diagnosis obtained within the past 42 days by a biopsy technique which leaves the major portion of the tumor intact Stage II (T_3-4, N_0 [N_0is defined as all imaged lymph nodes < 1.0 cm]) OR stage III (T_1-4, N_1-2 [with the definition of a clinically positive lymph node being any node ? 1.0 cm] Clinically staged by transrectal ultrasound or MRI with endocoil or endoluminal ultrasound AND CT scan, MRI, or combined PET/CT scan Tumor palpable by digital rectal exam OR accessible by proctoscope or sigmoidoscope Distal border of the tumor must be located < 12 cm from the anal verge Tumor amenable to curative resection* NOTE: *Curative resection can include pelvic exenteration No history of invasive rectal malignancy, regardless of disease-free interval No other rectal cancers (i.e., sarcoma, lymphoma, carcinoid, squamous cell carcinoma, or cloacogenic carcinoma) No synchronous colon cancer No clear indication of involvement of the pelvic side walls by imaging No evidence of metastatic disease

This randomized phase III trial is studying radiation therapy and either capecitabine or fluorouracil with or without oxaliplatin and comparing them to see how well they work when given before surgery in treating patients with resectable rectal cancer. It is not yet known whether radiation therapy and either capecitabine or fluorouracil is more effective with or without oxaliplatin in treating rectal cancer.