Tumor budding and CD8-positive (+) T-cells are recognized as prognostic factors in colorectal adenocarcinoma. We assessed CD8+ T-cell density and intratumoral budding in pretreatment rectal cancer biopsies to determine if they are predictive biomarkers for response to neoadjuvant therapy and survival. Pretreatment biopsies of locally advanced rectal adenocarcinoma from 117 patients were evaluated for CD8+ T-cell density using automated quantitative digital image analysis and for intratumoral budding and correlated with clinicopathological variables on postneoadjuvant surgical resection specimens, response to neoadjuvant therapy, and survival. Patients with high CD8+ T-cell density (≥157 per mm2) on biopsy were significantly more likely to exhibit complete/near complete response to neoadjuvant therapy (66% vs. 33%, p = 0.001) and low tumor stage (0 or I) on resection (62% vs. 30%, p = 0.001) compared with patients with low CD8+ T-cell density. High CD8+ T-cell density was an independent predictor of response to neoadjuvant therapy with a 2.63 higher likelihood of complete response (95% CI 1.04–6.65, p = 0.04) and a 3.66 higher likelihood of complete/near complete response (95% CI 1.60–8.38, p = 0.002). The presence of intratumoral budding on biopsy was significantly associated with a reduced likelihood of achieving complete/near complete response to neoadjuvant therapy (odds ratio 0.36, 95% CI 0.13–0.97, p = 0.048). Patients with intratumoral budding on biopsy had a significantly reduced disease-free survival compared with patients without intratumoral budding (5-year survival 39% vs 87%, p < 0.001). In the multivariable model, the presence of intratumoral budding on biopsy was associated with a 3.35-fold increased risk of tumor recurrence (95% CI 1.25–8.99, p = 0.02). In conclusion, CD8+ T-cell density and intratumoral budding in pretreatment biopsies of rectal adenocarcinoma are independent predictive biomarkers of response to neoadjuvant therapy and intratumoral budding associates with patient survival. These biomarkers may be helpful in selecting patients who will respond to neoadjuvant therapy and identifying patients at risk for recurrence.