Complete tumor response can be achieved in a certain proportion of patients with locally advanced rectal cancer, who achieve maximal response to neoadjuvant therapy (NAT). For these patients, a watch-and-wait (WW) or nonsurgical strategy has been proposed and is becoming widely practiced in order to avoid unnecessary surgical complications. Therefore, a non-invasive, reliable diagnostic tool for accurately evaluating complete tumor response is needed. Magnetic resonance imaging (MRI) plays a crucial role in both primary staging and restaging tumor response to NAT in rectal cancer without relying on resected specimen. In recent years, numerous efforts have been made to research the value of MRI in predicting and evaluating complete response in rectal cancer. Current MRI evaluation is mainly based on morphological and functional images. Morphologic MRI yields high soft tissue resolution, multiplanar images, and provides detailed depictions of rectal cancer and its surrounding structures. Functional MRI may help to distinguish residual tumor from fibrosis, therefore improving the diagnostic performance of morphologic MRI in identifying complete tumor response. Both morphologic and functional MRI have several promising parameters that may help accurately evaluate and/or predict complete response of rectal cancer. However, these parameters still have limitations and the results remain inconsistent. Recent development of new techniques, such as textural analysis, radiomics analysis and deep learning, demonstrate great potential based on MRI-derived parameters. This article aimed to review and help better understand the strengths, limitations, and future trends of these MRI-derived methods in evaluating complete response in rectal cancer.