Rectal cancer accounts for the second highest cancer-related mortality, which is predominant in Western civilizations. The treatment for rectal cancers includes surgery, radiotherapy, chemotherapy, and immunotherapy. Radiotherapy, specifically external beam radiation therapy, is the most common way to treat rectal cancer because radiation not only limits cancer progression but also significantly reduces the risk of local recurrence. However, therapeutic radiation-induced radioresistance to rectal cancer cells and toxicity to normal tissues are major drawbacks. Therefore, understanding the mechanistic basis of developing radioresistance during and after radiation therapy would provide crucial insight to improve clinical outcomes of radiation therapy for rectal cancer patients. Studies by various groups have shown that radiotherapy-mediated changes in the tumor microenvironment play a crucial role in developing radioresistance. Therapeutic radiation-induced hypoxia and functional alterations in the stromal cells, specifically tumor-associated macrophage (TAM) and cancer-associated fibroblasts (CAF), play a crucial role in developing radioresistance. In addition, signaling pathways, such as - the PI3K/AKT pathway, Wnt/β-catenin signaling, and the hippo pathway, modulate the radiation responsiveness of cancer cells. Different radiosensitizers, such as small molecules, microRNA, nanomaterials, and natural and chemical sensitizers, are being used to increase the effectiveness of radiotherapy. This review highlights the mechanism responsible for developing radioresistance of rectal cancer following radiotherapy and potential strategies to enhance the effectiveness of radiotherapy for better management of rectal cancer.