That a knock-in mouse harboring a dominant-negative thyroid hormone receptor (TR)-β (Thrb) mutation develops metastatic thyroid cancer strongly suggests the involvement of TRβ in carcinogenesis. Epigenetic silencing of the THRB gene is common in human cancers. The aim of the present study was to determine how DNA methylation affected the expression of the THRB gene in differentiated thyroid cancer (DTC) and how reexpression of the THRB gene attenuated the cancer phenotypes. We used methylation-specific PCR to examine the expression and promoter methylation of the THRB gene in DTC tissues. Thyroid cancer cells with hypermethylated THRB were treated with the demethylating agents 5'-aza-2'-deoxycytidine (5'-aza-CdR) and zebularine to evaluate their impact on the cancer cell phenotypes. THRB mRNA expression in DTC was 90% lower than in normal controls, and this decrease was associated with a higher tumor/lymph node staging. The promoter methylation level of the THRB gene had a significant negative correlation with the expression level of the THRB gene. Treatment of FTC-236 cells with 5'-aza-CdR or zebularine induced reexpression of the THRB gene and inhibited cell proliferation and migration. FTC-236 cells stably expressing TRβ exhibited lower cell proliferation and migration through inhibition of β-catenin signaling pathways compared with FTC-236 without TRβ. 5'-Aza-CdR also led to suppression of tumor growth in an in vivo xenograft model using FTC-236 cells consistent with the cell-based studies. These finding indicate that TRβ is a tumor suppressor and could be tested as a potential therapeutic target.