Rectal adenomas and cancers occur frequently. Small adenomas can be removed colonoscopically, whereas larger polyps are removed via conventional transanal excision. Owing to technical difficulties, adenomas of the mid- and upper rectum require radical resection. Transanal endoscopic microsurgery (TEM) was first designed as an alternative treatment for these lesions. However, since its development TEM has been also used for a variety of rectal lesions, including carcinoids, rectal prolapse and diverticula, early stage carcinomas and palliative resection of rectal cancers. The objective of this review is to describe the current status of TEM in the treatment of rectal lesions. Since the 1980s, TEM has advanced substantially. With low recurrence rates, it is the method of choice for resection of endoscopically unresectable adenomas. Some studies have shown benefits to its use in treating early T1 rectal cancers compared with radical surgery in select patients. However, for more advanced rectal cancers TEM should be considered palliative or experimental. This technique has also been shown to be safe for the treatment of other uncommon rectal tumours, such as carcinoids. Transanal endoscopic microsurgery may allow for new strategies in the treatment of rectal pathology where technical limitations of transanal techniques have limited endoluminal surgical innovations.