SRY-related HMG-box 17 (SOX17) encodes a member of the SOX (SRY-related HMG-box) family of transcription factors involved in the regulation of embryonic development and in the determination of the cell fate. Recently, it was considered as a tumor suppressor gene to inhibit canonical Wnt/β-catenin signaling pathway in several malignancies. However, the function of SOX17 in thyroid cancer was unknown. Therefore, we investigated the epigenetic changes and the function of SOX17 in thyroid cancer.The methylation status of the promoter region of SOX17 was detected using methylation-specific PCR in 63 papillary thyroid carcinoma (PTC) tissue, 10 normal thyroid tissue, and two thyroid cancer cell lines. Semi-quantitative RT-PCR was used to assess mRNA expression of SOX17 before and after 5-aza-2'-deoxycytidine treatment in thyroid cancer cell lines. Expression of SOX17 and β-catenin were detected by immunohistochemistry in PTC and adjacent tissue. Luciferase reporter assay, colony formation, transfection, and Western blotting were employed to analyze the effect of SOX17 on thyroid cancer cell proliferation and the function of SOX17 in the Wnt signal pathway.Loss of SOX17 expression was correlated to the promoter region hypermethylation in thyroid cancer cell lines. Re-expression of SOX17 was found in TPC-1 cell line after 5-aza-2'-deoxycytidine treatment. In primary thyroid cancer, 60.3% (38/63) were methylated and 39.7% (25/63) unmethylated. But no methylation was found in noncancerous thyroid tissues. Methylation of SOX17 was associated reversely with β-catenin expression in the cytoplasm or nucleus significantly in the PTC (P < 0.05). Colony formation was inhibited by re-expression of SOX17 in TPC-1 cells. SOX17 suppressed the Wnt signaling pathway and the HMG domain was essential for this effect.SOX17 was frequently methylated in human PTC. Loss of SOX17 expression was induced by promoter region hypermethylation. SOX17 inhibited thyroid cancer proliferation. Methylation of SOX17 activated the Wnt signaling pathway in human thyroid cancer.