Several lines of evidence have shown that long non-coding RNAs (lncRNAs) are dysregulated in many diseases. Nevertheless, the biological relevance of the lncRNAs in papillary thyroid carcinoma (PTC) has not been fully explored. We demonstrated that CTC was a negative regulator of PTC cell migration and invasion in vitro and in vivo. We found that microRNA-146 (miR-146) is an inhibitory target of CTC. We then demonstrated that CTC functioned as a miR-146 decoy to de-repress expression of KIT. Further study demonstrated that CTC modulated the progression and chemoresistance of PTC cells via miR-146 and KIT. The analysis of hundreds of clinical specimens revealed that CTC and KIT levels were downregulated, whereas miR-146 levels were greater in PTC tissues than in normal thyroid. Their expression levels correlated with one another. In conclusion, CTC functions as a competing endogenous RNA to inhibit the progression and chemoresistance of PTC cells, and identifies CTC serve as a potential therapeutic agent to suppress PTC progression.