This pilot study was performed to evaluate the risk of anastomotic leakage (AL) and pelvic autonomic nerve dysfunction, and the effects of (125) I brachytherapy after intraoperative permanent implantation of iodine-125 seeds within the patients with rectal carcinoma. In a cohort consisting of 80 rectal cancer patients who received potentially curative resection of rectal carcinoma with implantation of (125) I brachytherapy or radical resection of rectal carcinoma underwent total mesorectal excision. The incidences of AL, fecal incontinence, urinary dysfunction, and sexual dysfunction were calculated for comparison, and risk factors for these complications were analyzed by logistic regression. Rates of tumor recurrence and overall survival were evaluated. Six out of 17 (35.29%) patients in the (125) I implant group and 1 out of 34 (2.94%) patients in the non-implant group were complicated with AL (P = 0.006). The incidences of urinary dysfunction (P = 0.005) and fecal incontinence (P = 0.023) were significantly different between the two groups. Multivariate analyses revealed that (125) I brachytherapy was an independent risk factor for AL (odds ratio, 18.702; 95%CI, 1.802-194.062; P = 0.014) and urinary dysfunction (odds ratio, 4.340; 95%CI, 1.158-16.264; P = 0.029), respectively. At postoperative 2-year, the recurrence rates were 5.56% in the (125) I implant group and 9.09% in the non-implant group (P = 0.029). Intraoperative implantation of (125) I brachytherapy significantly increases the risk of AL, fecal incontinence, urinary dysfunction, and improves local control and do not improve overall survival after total mesorectal excision. © 2015 Journal of Gastroenterology and Hepatology Foundation and John Wiley & Sons Australia, Ltd.