The cut-off value and prognostic significance of postoperative carcinoembryonic antigen (CEA) level in rectal cancer after preoperative chemoradiotherapy (CRT) and curative surgery are still unclear. 1559 rectal cancer patients staged with cT3-4N0-2M0 received preoperative CRT and total mesorectal excision (TME). CEA levels were measured before CRT and 3-4 weeks after surgery. Clinicopathologic factors that could be associated with tumor recurrence and patient survival were analyzed. The cumulative probability of tumor recurrence showed a steep increase with a cutoff value of 2.5 ng/mL for postoperative CEA level, and the gradient decreased as the CEA levels increased above 2.5 ng/mL. After a median follow-up time of 46.7 months, patients with postoperative CEA level >2.5 ng/mL had significantly lower relapse-free survival (RFS) (65.2 vs. 75.6 %, P < 0.001) and overall survival (OS) (78.1 vs. 88.3 %, P < 0.001) at 5 years than patients with postoperative CEA level ≤2.5 ng/mL. On the multivariate analysis, postoperative CEA level was a significant prognostic factor for RFS (HR 1.561; 95 % CI 1.221-1.996; P < 0.001) and OS (HR 2.073; 95 % CI 1.498-2.869; P < 0.001). Postoperative CEA level independently affected RFS irrespective of pre-CRT CEA level. Postoperative CEA level was a significant predictor for distant recurrence (P = 0.004), but not for locoregional recurrence (P = 0.472). Postoperative CEA level >2.5 ng/ml is a predictor of distant metastasis and a negative prognostic factor for survival in rectal cancer patients who receive preoperative CRT and curative surgery.