Capecitabine (Xeloda) is the first orally available fluoropyrimidine approved for use in patients with cancer. It was initially approved for use in metastatic breast cancer, but significant data also support its use in the management of metastatic colorectal cancer. Capecitabine relies on a series of metabolic steps, the last of which occurs primarily within cancer cells. This results in selective activation of the compound within cancer cells, thereby reducing systemic toxicities and allowing for greater dose intensity. This article reviews selected phase I, phase II, and phase III clinical trials conducted in patients with colorectal cancer that document the metabolic activation of this compound and support its use in patients with advanced colorectal cancer.