Objective: To evaluate the prognostic utility of postoperative circulating tumor DNA (ctDNA) for recurrence and treatment response in patients with rectal cancer undergoing upfront surgery. Background: ctDNA-based molecular residual disease (MRD) testing shows promise in colorectal cancer, but its role in patients with rectal cancer not receiving neoadjuvant therapy is unclear. This study evaluates whether postoperative ctDNA predicts disease-free survival (DFS) and guides adjuvant chemotherapy (ACT) decisions. Methods: We analyzed ctDNA from patients with stage II to III rectal cancer (N=250) enrolled in the GALAXY study, a multicenter registry in Japan. A clinically validated, personalized, tumor-informed 16-plex PCR next-generation sequencing assay (Signatera) was used to detect and quantify ctDNA. The primary outcome was DFS, defined as the time from landmark to recurrence, death, or the latest radiologic assessment. Results: In the MRD window (2–10 wk postsurgery, before ACT), 14.2% (35/246) of patients were ctDNA-positive and had significantly shorter DFS (HR: 9.96, 95% CI: 5.76–17.2, P <0.0001). Among patients who were ctDNA-positive in the MRD window, a significant benefit from ACT was observed (HR: 0.28, 95% CI: 0.09–0.89, P =0.031), whereas no benefit was seen in ctDNA-negative patients (HR: 0.59, 95% CI: 0.26–1.35, P =0.211). When analyzing ctDNA dynamics from the MRD window to 6 months postsurgery, recurrence risk was higher in patients who converted from ctDNA-negative to positive (HR: 8.22, 95% CI: 1.86–36.32, P =0.0055) and who remained ctDNA-positive (HR: 45.48, 95% CI: 14.31–144.57, P <0.0001) compared with serially ctDNA-negative patients. Conclusions: Postoperative ctDNA status is a robust biomarker predicting recurrence risk and ACT benefit in patients with rectal cancer undergoing upfront surgery.