Nonalcoholic fatty liver disease (NAFLD) is a hepatic manifestation of metabolic syndrome. Obesity and metabolic syndrome are known risk factors for thyroid cancer. We investigated the association between NAFLD and thyroid cancer risk in young adults. This nationwide cohort study included 1 135 967 participants aged 20 to 39 years who underwent 4 consecutive health screenings in South Korea. NAFLD was categorized using the fatty liver index (FLI), as follows: ≥60, 30 to 60, and <30. The cumulative FLI points were defined as the number of times participants had a FLI of ≥30 (0-4). During a median follow-up of 5.2 years, 4126 participants (0.36%) were newly diagnosed with thyroid cancer. Compared with the participants with an FLI of <30, those with an FLI of 30 to 60 (men: hazard ratio [HR] 1.36 [95% CI, 1.22-1.51] and women: HR 1.44 [1.21-1.70]) and those with an FLI of ≥60 (men: HR 1.71 [1.53-1.92] and women: HR 1.81 [1.46-2.25]) had a significantly higher risk of thyroid cancer. Participants with higher cumulative FLI points had a higher risk of thyroid cancer compared to those with a cumulative FLI point of 0 (P < .001). During the follow-up period, the participants with an increased FLI exhibited an increased risk of thyroid cancer. NAFLD was associated with an increased risk of thyroid cancer in young adults. Repeatedly elevated FLI and progression of NAFLD were associated with an increased risk of thyroid cancer in this study.