Background: The aim of this study was to establish the oncological and functional results of organ preservation with a watch-and-wait approach (W&W) and selective transanal endoscopic microsurgery (TEM) in patients with a clinical complete or near-complete response (cCR) after neoadjuvant chemoradiation for rectal cancer. Methods: Between 2004 and 2014, organ preservation was offered if response assessment with digital rectal examination, endoscopy, and MRI showed (near) cCR. Watch-and-wait was offered for cCR, and two options were offered for near cCR: TEM or reassessment after three months. Follow-up included endoscopy and MRIs every three months during the first year, and every six months thereafter. Long-term outcome was assessed with Kaplan-Meier curves. Functional outcome was assessed with colostomy-free survival and Vaizey incontinence score (0 = perfect continence, 24 = totally incontinent). Results: One hundred patients were included, with median follow-up of 41.1 months. Sixty-one had cCR at initial response assessment. Thirty-nine had near cCR, of whom 24 developed cCR at the second assessment and 15 patients underwent TEM (9 ypT0, 1 ypT1, 5 ypT2). Fifteen patients developed a local regrowth (12 luminal, 3 nodal), all salvageable and within 25 months. Five patients developed metastases, and five patients died. Three-year overall survival was 96.6% (95% confidence interval [CI] = 89.9% to 98.9%), distant metastasis-free survival was 96.8% (95% CI = 90.4% to 99.0%), local regrowth-free survival was 84.6% (95% CI = 75.8% to 90.5%), and disease-free survival was 80.6% (95% CI = 70.9% to 87.4%). Colostomy-free survival was 94.8% (95% CI = 88.0% to 97.8%), with a good continence after watch-and-wait (Vaizey = 3.4, SD = 3.9) and moderate after TEM (Vaizey = 9.7, SD = 5.1). Conclusions: Organ preservation appears oncologically safe for selected rectal cancer patients with a cCR or near cCR after neoadjuvant chemoradiation when applying strict selection criteria and frequent follow-up, including endoscopy and MRI. The low colostomy rate and the good long-term functional outcome warrant discussing this option with the patient as an alternative to major surgery.