Modern advances in molecular technology have given us the chance to establish a new insight into thyroid carcinogenesis. Gene expression in thyroid malignancies usually reveals highly consistent profiles, which leads to questioning of the classic concept of multistep carcinogenesis, in which cancer cells are produced from well-differentiated benign cells by transformation caused by accumulating damage to their genome. We propose a novel hypothesis of thyroid carcinogenesis, the fetal cell carcinogenesis hypothesis, in which cancer cells are derived from the remnants of three types of fetal thyroid cells, instead of normal thyroid follicular cells. This hypothesis explains well the clinical and biologic features and recent molecular evidence of thyroid carcinoma. It suggests the importance of clarifying the molecular mechanism of thyroid development and the identification of fetal thyroid cells, especially thyroid stem cells (TSCs), because such data will lead to better understanding of thyroid carcinogenesis and thyroid regeneration.