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Neoadjuvant therapy has become a cornerstone in the management of locally advanced rectal cancer (LARC). In this single-arm, open-label phase II study, we evaluated the efficacy and safety of total neoadjuvant chemotherapy (TNT) using a CapOX regimen combined with a programmed cell death protein 1 (PD‑1) antibody (sintilimab) and interleukin‑2 (IL‑2) in patients with microsatellite stable (MSS)/defining proficient mismatch repair (pMMR) LARC. A total of 33 patients, aged 18-75 years, with rectal tumors located within 12 cm from the anal verge and staged as cT3/4N_anyM0 or cT_anyN⁺M0, were enrolled. Patients received a regimen consisting of oxaliplatin, sintilimab, capecitabine, and IL‑2 administered in a three‑week cycle, with response evaluations performed after every two cycles. Following six cycles of treatment, 33 patients underwent radical surgery, achieving a 100% R0 resection rate. The pathological complete response (pCR) rate was 42.4% (95% CI: 25.68-59.16%) while the remaining 19 patients (57.6%, 95% CI: 41.07-74.09%) were assessed as having a partial response. The tumor regression grades (TRG) were, TRG1: 3 cases (9.1%, 95% CI: 1.90-25.97%), TRG2: 14 cases (42.4%, 95% CI: 26.27-60.38%), and TRG3: 2 cases (6.1%, 95% CI: 0.73-20.37%), respectively. Surgical safety reported as no cases of grade B/C anastomotic leakage or bowel obstruction. Adverse events (AEs) were manageable, with a 21.2% incidence of grade 3 events and no grade IV/V events or treatment‑related deaths. With a median follow‑up of 25.5 weeks, no recurrences were observed. Analysis of blood and tissue samples from patients with different treatment outcomes revealed significant activation of CD8⁺ T cells, NK cells, and M1 macrophage subsets in the tumor microenvironment of patients achieving pCR. These compelling data demonstrate promising efficacy with a favorable safety profile in MSS/pMMR LARC. These findings warrant studies to validate this regimen as a novel treatment paradigm for rectal cancer. ClinicalTrials.gov registration: NCT06108596.