Thyroid cancer has an overwhelming incidence in the population. Thus, there is an urgent need to understand the underlying mechanism of its occurrence and development, which may provide new insights into therapeutic strategies. The role and mechanism of TFCP2L1 in regulating the progression of thyroid cancer remains unclear. Public databases and clinical samples were used to detect the expression of TFCP2L1 in cancer and non-cancer tissues. Kaplan-Meier and Cox regression analyses were used to compare the differences in survival probability of the TFCP2L1 highly expressing group and the TFCP2L1 lowly expressing group. Functional assays were used to evaluate the biological effect of TFCP2L1 on thyroid cancer cells. RNA sequencing and enrichment analyses were used to find out pathways that were activated or inactivated by TFCP2L1. We demonstrated that TFCP2L1 was significantly downregulated in thyroid cancer. Decreased expression of TFCP2L1 was associated with malignant clinicopathological characteristics. Kaplan-Meier and Cox regression analyses indicated that thyroid tumor patients with low TFCP2L1 expression presented shorter disease-free interval and progression-free interval. Additionally, TFCP2L1 expression was positively correlated with thyroid differentiation degree. Overexpression of TFCP2L1 in thyroid cancer cells inhibited cell growth and motility in vitro, and tumorigenicity and metastasis in vivo. Mechanistically, the NF-κB signaling pathway was found inactivated by overexpressing TFCP2L1. Our results suggest that TFCP2L1 is a tumor suppressor and potential differentiation regulator, and might be a potential therapeutic target in thyroid cancer.