Inclusion Criteria:

• 18 years or older, Histologically-confirmed colorectal carcinoma, Non-resectable metastatic or locally advanced disease, Objective progression after one prior chemotherapeutic regimen for metastatic or locally advanced disease with an interval of at least 4 weeks between the last administration of chemotherapy and the first administration of study treatment, Measurable lesion according to the RECIST, life expectancy more than 12 weeks, World Health Organisation (WHO) performance status of 0, 1 or 2.

Exclusion Criteria:

• 1. Prior adjuvant chemotherapy if the disease-free interval is less than 6 months Known leptomeningeal or central nervous system (CNS) metastases Known severe hypersensitivity to ZD1839 or any of the excipients of this product Known, severe hypersensitivity to capecitabine or any of the excipients of this product Any evidence of clinically active interstitial lung disease (subjects with chronic stable radiographic changes who are asymptomatic need not be excluded) Other co-existing malignancies or malignancies diagnosed within the last 5 years with the exception of basal cell carcinoma or cervical cancer in situ Any unresolved chronic toxicity greater than CTC grade 1 from previous anticancer therapy Absolute neutrophil count (ANC) less than 1500 mm3 (1.5 x 109/litre [L]), platelets less than 100 000 mm3 (100 x 109/L) or haemoglobin less than 10 g/dl Serum bilirubin greater than 1.5 times the upper limit of the reference range (ULRR) Serum creatinine greater than 1.25 times the ULRR Creatinine clearance below 30 mL/min (Cockroft and Gault) Alkaline phosphatase (ALP) greater than 5 times the ULRR or greater than 20 times the ULRR in subjects with known bone metastasesAlanine aminotransferase (ALT) or aspartate aminotransferase (AST) greater than 2.5 times the ULRR if no demonstrable liver metastases, or greater than 5 times the ULRR in the presence of liver metastases Prothrombin time (PT) or activated partial thromboplastin time (aPTT) less than 70% normal laboratory value As judged by the investigator, any evidence of severe or uncontrolled systemic disease (e.g., unstable or uncompensated respiratory, cardiac, hepatic, or renal disease) Evidence of any other significant clinical disorder or laboratory finding that makes it undesirable for the subject to participate in the study Pregnancy or breast feeding (women of child-bearing potential) Concomitant use of phenytoin, carbamazepine, rifampicin or barbiturates Treatment with a non-approved or investigational drug within 30 days before Day 1 of study treatment