Astrocyte elevated gene-1 (AEG-1), known as an oncogene, is overexpressed in various cancers and implicated in tumor progression and metastasis. However, its functional significance and underlying molecular mechanisms in thyroid cancer remain to be elucidated. In the present study, we detected the potential function of AEG-1 in papillary thyroid cancer (PTC). We also investigated the relation between AEG-1 and matrix metalloproteases (MMP)2 and 9 through immunohistochemistry, western blotting, real-time PCR, immunofluorescence staining, zymography and co-immunoprecipitation (Co-IP). We found that overexpression of AEG-1 in PTC was positively correlated with lymph node metastasis and MMP2/9 expression. Knockdown of AEG-1 reduced the capacity of migration and invasion through downregulation of MMP2/9 in thyroid cancer cells. Furthermore, we firstly found that AEG-1 interacted with MMP9 in thyroid cancer cells. AEG-1 was associated with the activation of the nuclear factor κB (NF-κB) signaling pathways in thyroid cancer cells. Overall, our results for the first time showed that AEG-1 interacted with MMP9 in thyroid cancer cells and AEG-1 expression was closely associated with progression and metastasis of papillary thyroid cancer. AEG-1 might be a potential therapeutic target in papillary thyroid cancer.