Dysregulation of long intergenic non-protein coding RNA 00,641 (LINC00641) is associated with the malignancy progression of multiple cancers, including thyroid carcinoma. The current study aimed to determine the role of LINC00641 in papillary thyroid carcinoma (PTC) and the underlying mechanism. We found that LINC00641 was downregulated in PTC tissues and cells(p < 0.05), and overexpression of LINC00641 inhibited PTC cell proliferation and invasion, and induced apoptosis(p < 0.05), while silencing LINC00641 promoted the proliferation and invasion in PTC cells, and inhibited cell apoptosis(p < 0.05). Furthermore, we found that Glioma-associated oncogene homolog 1 (GLI1) expression was negatively correlated with LINC00641 expression in PTC tissues (r2 = 0.7649, p < 0.0001), and silencing GLI1 inhibited PTC cell proliferation and invasion, and induced apoptosis(p < 0.05). Meanwhile, RNA immunoprecipitation (RIP) and RNA pull-down assays confirmed that insulin-like growth factor 2 mRNA-binding protein 1 (IGF2BP1) bound to LINC00641 as an RNA binding protein, and overexpression of LINC00641 destabilized GLI1 mRNA by competitively binding to IGF2BP1. Rescue experiments revealed that overexpression of GLI1 restored the inhibitory effect of LINC00641 overexpression on activation of the AKT pathway, as well as PTC cell proliferation and invasion, and counteracted the induction of cell apoptosis by LINC00641 overexpression. Finally, in vivo experimental results showed that overexpression of LINC00641 markedly suppressed tumor growth and reduced expression of GLI1 and p-AKT in xenograft tumor mice(p < 0.05). In summary, this study highlighted that LINC00641 plays a critical role in the malignant biological progression of PTC by regulating the LINC00641/IGF2BP1/GLI1/AKT signaling pathway, which may serve as a potential therapeutic target for PTC.