Abstract Purpose: The prognostic role of tumor proliferation in colorectal cancer has been unclear, whereas T-cell proliferation has been associated with favorable outcomes. We investigated characteristics and prognostic significance of proliferating tumor and cytotoxic T cells. Experimental Design: Two independent colorectal cancer cohorts comprising 1,839 patients were analyzed using multiplex IHC for MKI67 (Ki-67), CD8, and CK. Densities and spatial localization of MKI67+ and MKI67− cytotoxic T cells and tumor proliferation rate were assessed via digital image analysis. Single-cell RNA sequencing data from 62 colon cancers were used to characterize proliferating and nonproliferating cells. Results: High MKI67+ tumor cell percentage was associated with better cancer-specific survival, an antitumorigenic immune microenvironment, downregulation of epithelial–mesenchymal transition, and upregulation of MYC signaling. In the larger cohort, the multivariable HR for high versus low proliferation rate was 0.60 (95% confidence interval, 0.43–0.83). MKI67+CD8+ T cells exhibited high expression of effector molecules such as GZMB and IFNG and stronger association with favorable prognosis than MKI67−CD8+ T cells. The multivariable HR for high versus low MKI67+CD8+ T-cell density was 0.49 (95% confidence interval, 0.35–0.70). However, spatial analysis of tumor cell–T cell co-localization indicated comparable prognostic significance for both subsets when considering their proximity to tumor cells. Conclusions: Tumor cell proliferation is a marker for better prognosis in colorectal cancer. Although proliferating cytotoxic T cells demonstrate stronger prognostic value than nonproliferating cytotoxic T cells, spatial proximity to tumor cells diminishes this difference. These findings provide new insights into the interplay between tumor proliferation, immune response, and patient outcomes in colorectal cancer.