Sunitinib, a multi-targeted tyrosine kinase inhibitor, is frequently incorporated into the management of papillary thyroid carcinoma refractory to standard therapies. Although clinical trials are in progress, the mechanism of action in papillary thyroid carcinomas is not clear, especially regarding the effect on BRAF mutation. We investigated the effect of sunitinib on papillary thyroid carcinoma cells harboring RET/PTC rearrangement and BRAF mutation using TPC-1M, SNU-790, and B-cPAP cell lines. Cell growth of papillary thyroid cancer cells with RET/PTC rearrangement was effectively inhibited at low doses of sunitinib (IC50=0.658 μM), whereas that of BRAF mutated cells required higher doses. Immunoblotting revealed effective blocking of MEK/ERK pathway in RET/PTC rearrangement cells, but not in BRAF mutated cells. Cell cycle analysis showed G1 arrest in RET/PTC rearrangement cells. In vivo orthotopic thyroid cancer mouse model demonstrated statistically significant tumor growth inhibition by sunitinib in RET/PTC rearrangement cancer cells. We conclude that sunitinib effectively inhibits RET/PTC rearrangement cells but not BRAF mutated cells. These data suggest that sunitinib exerts its effect by inhibiting the upstream MAPK signaling cascade. These findings support the unsatisfactory treatment outcomes of sunitinib in many already ongoing clinical trials compared to other tyrosine kinase inhibitors. Clinical application of sunitinib should be directed accordingly.