We examined resected specimens from 40 cases of advanced rectal cancer to determine the extent of microtubular cancer nests and undifferentiated cancer cells (budding). We investigated the relationship between this budding and lymphatic invasion (ly), venous invasion (v), and lymph node metastasis (n), respectively. Moreover, we examined the relationship between ly, budding, and n in the preoperative biopsy specimens of 112 patients, including those of the 40 cases mentioned above. The degree of budding, which was abundant in the actively invasive region, showed a strong correlation with the degree of ly and the existence of n in the resected specimens. Also, budding was recognized in a relatively large portion of the biopsy specimens (52 of 112 [46.4%]) and lymph node metastasis was found in 41 of 52 specimens (78.8%). In 57 specimens, neither ly nor budding was found, and 16 of these specimens (28.1%) had positive lymph nodes. These results implied that the degree of budding in the actively invasive region can be a great help in predicting the presence of n. The presence or absence of budding in preoperative biopsy specimens also can be an important factor (along with the degree of differentiation and ly) in estimating the probability of n.