Purpose: Total mesorectal excision (TME) alone is the standard care for early rectal cancers (T1,2N0). Preoperative clinical staging with MRI has a 61%-87% sensitivity to detect T3/4 and nodal disease.   Understaged (AJCC combined stage) patients may, therefore, miss the opportunity and benefit of neoadjuvant chemoradiotherapy (nCRT). This study investigates the impact of preoperative understaging on recurrence and survival rates.   Methodology: This study conducted a retrospective cohort study of rectal cancer patients undergoing TME without nCRT at a tertiary centre from 2004 to 2023. Clinically understaged patients with pathological stage III disease were compared to appropriately staged clinical stage III patients who received nCRT. Clinicopathological data was collected and analysed using SPSS ver.29.   Results: 304 participants (60.5% male; mean age 67.8 ± 12 years) were included. Among them, 102 (34%) were preoperatively understaged (AJCC combined staging), with a lower proportion of males (46.1%, p<0.001). About a fifth of understaged patients did not complete adjuvant therapy. In comparison to appropriately staged (TME only) participants, the overall recurrence was higher in understaged patients (20.6% vs. 10.4%, p=0.006), as was cancer-specific mortality (15.7% vs. 7.9%, p=0.004). Compared to appropriately staged clinical stage III participants (ypTnN+), understaged patients had higher recurrence (53.6% vs. 32.6%, p=0.001) and cancer-related mortality (35.7% vs. 22.1%, p=0.003). Conclusion: One-third of patients undergoing upfront TME for rectal cancer had undetected T3/4 or nodal disease, leading to higher overall recurrence and cancer-specific mortality, a cautionary tale on the shortfalls of clinical staging.