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Locally advanced rectal cancer (LARC) remains challenging to treat due to high recurrence rates and limited therapeutic options, particularly for patients with high-risk features. This prospective, multicenter, single-arm, open-label phase 2 trial (ClinicalTrials.gov identifier: NCT05300269) evaluated the efficacy and safety of SHR-1701, a novel bifunctional fusion protein targeting both PD-L1 and TGF-β, in combination with neoadjuvant chemoradiotherapy (CRT) followed by total mesorectal excision (TME) for high-risk LARC. Eligible patients had at least one high-risk factor, including cT3c-d or cT4 tumors, positive mesorectal fascia, extramural vascular invasion, or involvement of ≥4 lymph nodes. Patients received concurrent SHR-1701 and CRT, followed by two cycles of SHR-1701 plus XELOX and subsequent TME surgery. Postoperatively, patients underwent six additional cycles of SHR-1701 plus XELOX. The primary endpoints were pathological complete response (pCR) rate and safety. Among the 37 enrolled patients, 36 (97.3 %) completed the planned full-dose radiotherapy (50.4 Gy in 28 fractions) and subsequently underwent surgery. The pCR rate was 36.1 % (13/36). The median intervals from neoadjuvant therapy initiation to surgery and from surgery to adjuvant therapy were 112 days (range, 95-139) and 29 days (range, 22-59), respectively. The median follow-up was 9.9 months (range, 2-18) from the first dose of capecitabine. Grade ≥3 treatment-related adverse events during neoadjuvant therapy occurred in 40.5 % (15/37) of patients, most commonly lymphopenia (37.8 %, 14/37) and anemia (5.4 %, 2/37). One patient experienced fatal immune-mediated myocarditis prior to surgery. Overall, the addition of SHR-1701 to CRT demonstrated encouraging efficacy and manageable safety in high-risk LARC, supporting further investigation in larger randomized trials.