In recent years, more and more circular RNAs (circRNAs) have been identified in multiple tissues and cells. Increasing evidences show circRNAs play important roles in human cancers. However, the role of circRNAs in papillary thyroid carcinoma (PTC) remains largely unknown. In this study, we identified a new circRNA circZFR that was significantly upregulated in PTC tissues compared to adjacent normal tissues. Furthermore, circZFR expression level was negatively correlated with clinical severity. We found that circZFR knockdown dramatically inhibited the proliferation, migration and invasion of PTC cells in vitro. Mechanistically, we found circZFR could promote C8orf4 expression via serving as a competing endogenous RNA (ceRNA) of miR-1261 in PTC cells. Rescue assays indicated that restoration of C8orf4 significantly attenuated the inhibitory effects of circZFR knockdown on PTC cell proliferation, migration and invasion. In summary, our findings demonstrated that circRNA circZFR exerted oncogenic roles via regulating miR-1261/C8orf4 axis in PTC, which suggested circZFR might be a potential therapeutic target.