The potential association between Hashimoto's thyroiditis (HT) and papillary thyroid carcinoma (PTC) has been studied from different perspectives for many years. This study was aimed to evaluate the impact of HT on the clinical outcomes of PTC patients after radioactive iodine (RAI) therapy. We conducted a retrospective study on consecutive patients with PTC who underwent RAI therapy from April 2017 to May 2020. The diagnosis of HT was based on pathological examination, and patients were divided into the HT and non-HT group. Distributions of age, gender, ultrasound features, papillary variants, extrathyroidal extension, and other histopathological characteristics were observed. Propensity score matching (PSM) was used to compare the clinical features and outcomes between the two groups at 1 and 3-year follow-up. In total, 782 patients with PTC were enrolled (570 women, 212 men). HT was presented in 130 (16.6%) patients, and was associated with younger age, smaller primary tumors, less extrathyroidal extension, and less lymph node metastasis at presentation. On review of the images, only calcification and blood flow distribution were significantly different among the US features (P < 0.05). At the end of follow-up (three years), the responses to RAI therapy were significantly different between the two groups (ER: 76.9% vs 64.9%; IDR:11.5% vs 17.2%; BIR: 4.6% vs 10.7%; SIR: 6.9% vs 7.2%, P = 0.03). Patients with HT had less frequently evidence of disease (11.6% vs 17.9%). When compared with the matched groups, 123 pairs of patients were successfully matched, PTC patients with HT were found to have a better response to RAI therapy. PTC patients with HT had less aggressive characteristics at presentation. Importantly, the presence of HT not only had a significant association with the outcome, but was also protective from the risk of recurrence.