Background: Adjuvant chemotherapy (CT) following neoadjuvant chemoradiation and surgery for locally advanced rectal cancer (LARC) is widely adopted, despite uncertain survival benefit. Circulating tumor DNA (ctDNA) detection after surgery has been shown to be a strong prognostic marker in localized colorectal cancer and potentially could inform adjuvant treatment decision making. Methods: AGITG DYNAMIC-Rectal is a multi-centre randomized controlled phase II trial. Eligible patients (pts) had LARC (cT3-4 and/or cN+) treated with neoadjuvant chemoradiation, total mesorectal excision, and were fit for adjuvant CT. Pts were randomly assigned 2:1 to ctDNA-guided management or standard management (clinician decision). A tumor-informed personalized ctDNA assay was used. For the ctDNA-guided group, a positive result at 4 and/or 7 weeks after surgery prompted 4 months of oxaliplatin-based or fluoropyrimidine CT; for ctDNA-negative patients, no chemotherapy if ypN0 or clinician’s choice if ypN+. The primary endpoint was adjuvant CT use. A key secondary endpoint was non-inferiority in RFS rate at 3 years. The target sample size of 408 would provide 80% power with 95% confidence to demonstrate non-inferiority between the two arms with a margin of at most 10%. Results: The study ceased recruitment prematurely due to COVID-19 and increasing adoption of total neoadjuvant therapy. 230 eligible pts were enrolled from Jul 2018 to Nov 2021, median follow-up was 37 months. In the 155 ctDNA-guided patients, ctDNA analysis was successful in 150 (97%) pts and 42 (28%) were ctDNA-positive. Fewer pts in the ctDNA-guided arm received adjuvant CT (71/155, 46%) compared to 58/75 (77%) pts receiving standard management (p < 0.001). Overall, an oxaliplatin-based doublet was administered in 43 (28%) and 19 (25%) of ctDNA-guided compared to standard management pts (P = 0.82). 3-year recurrence-free survival for ctDNA-guided and standard management was 76% and 82% respectively (difference 6%, 95% CI: -6% to 17%). Cumulative probability of distant and locoregional recurrence at 3 years for ctDNA-positive pts treated with CT were 36% and 11% respectively; for ctDNA-negative pts without adjuvant CT were 12% and 1%. Of the 15 ctDNA-negative pts who recurred, 12 (80%) were lung only, 1 (7%) peritoneal and lung, and 2 (13%) nodal only relapse. Conclusions: A ctDNA-guided approach to adjuvant therapy for LARC post neoadjuvant chemoradiation and surgery was associated with a reduced rate of CT administration. The small sample size precludes any conclusions to be drawn about the non-inferiority of ctDNA-guided vs standard management. The recurrence rate in treated ctDNA positive pts appears low when compared to untreated historical controls. Our data confirms a lower risk of recurrence in pts with undetectable post-op ctDNA, with a notable proportion of these being in the lung. Clinical trial information: ACTRN12617001560381.