Serum DNA methylation markers may potentially be useful in diagnosing thyroid cancer and monitoring its recurrence. The objective of the study was to assess the utility of serum DNA methylation as a diagnostic test for patients with thyroid nodules and a monitoring test to detect thyroid cancer recurrence in previously treated patients. Using real-time quantitative methylation-specific PCR, we analyzed the methylation status of five genes (CALCA, CDH1, TIMP3, DAPK, and RARbeta2) on 96 bisulfite-treated serum DNA samples isolated preoperatively from either solid thyroid nodule patients or patients in follow-up for history of treated thyroid cancer. Diagnostic sensitivity, specificity, and accuracy of serum DNA methylation marker for thyroid cancer were measured. For the patients with thyroid nodules, when a positive result was defined by a serum methylation level above the appropriately chosen cutoff value for any one of the five genes, the preoperative diagnostic sensitivity for thyroid cancer was 68% (26 of 38), the specificity was 95% (18 of 19), and the overall preoperative diagnostic accuracy was 77%, with positive and negative predictive values of 96 and 60%, respectively. In a subset of patients with cytologically indeterminate thyroid nodules, serum DNA methylation testing could correctly diagnose eight of 11 (73%) cancers and four of four (100%) benign tumors, with a diagnostic accuracy of 80%. We also analyzed these serum DNA methylation markers in 39 previously treated thyroid cancer patients. Among the 10 patients proved to have recurrent disease by conventional measures, seven (70%) were positive on methylation testing. Among the 29 patients who had no corroboration of residual or recurrent disease by conventional studies, six (21%) were positive for serum DNA methylation markers. We have demonstrated the potential usefulness of serum DNA methylation markers as a novel tool for differential diagnosis of solid thyroid nodules and thyroid cancer recurrence monitoring.