During Phase Ib, we will evaluate the safety and determine the MTD/RP2D of CRLX101 + capecitabine (Cape) and radiation therapy (XRT) in patients with rectal cancer using the traditional 3+3 dose escalation design. Adverse events (AEs) will be evaluated via the CTCAE version 4.0. Patients in Phase Ib will also be followed for pathological response if they have resectable disease.