Background Total thyroidectomy is well accepted as initial surgery for papillary thyroid cancer (PTC), but the extent of the thyroidectomy remains a matter of controversy. This study was designed to investigate the long-term clinical outcome of PTC patients who had undergone thyroid lobectomy and to elucidate the indications of lobectomy as initial surgery. Methods The cases of 1,088 PTC patients who underwent thyroid lobectomy with curative intent at Ito Hospital between 1986 and 1995 were analyzed retrospectively in this study. None of the patients had received postoperative radioactive iodine (RAI) ablation therapy. The median follow-up period was 17.6 years. All clinical outcomes, including recurrence and death as a result of PTC or other reasons, were evaluated. To establish the indications for lobectomy as initial surgery for PTC, the potential risk factors, such as age, sex, primary tumor size, extrathyroidal invasion, and clinical lymph node metastasis at the time of the initial surgery, were assessed statistically for associations with recurrence and disease-related death. Results The remnant-thyroid recurrence-free survival (RT-RFS) rate, the regional- lymph-node recurrence-free survival (L-RFS) rate, and the distant-recurrence-free survival (D-RFS) rate as of 25 years after surgery were 93.5, 90.6, and 93.6%, respectively. The cause-specific survival (CSS) rate at 25 years was 95.2%. Univariate and multivariate analyses showed that none of the factors assessed were significantly associated with the RT-RFS rate. Tumor size, clinical lymph node metastasis, and extrathyroidal invasion were significantly associated with the L-RFS rate. The D-RFS and CSS rates were both significantly lower in the group of patients who were aged 45 years old or older, the group whose tumors were larger than 40 mm, and the group with extrathyroidal invasion. Based on the above findings, we classified the patients into four groups according to age <45 or ≥45 years, tumor size ≤40 or >40 mm, whether clinical lymph node metastasis was present, and whether extrathyroidal invasion was present. None of the patients without any of these four risk factors died of PTC. On the other hand, 22 patients who died of PTC were positive for one or more of these four factors. Conclusions The long-term clinical outcome of the PTC patients who had been treated by lobectomy without RAI ablation was excellent. Based on the above results, we concluded that lobectomy is a valid alternative to total thyroidectomy for the treatment of PTC patients who are younger than aged 45 years, whose tumor diameter is 40 mm or less, and who do not have clinical lymph node metastasis or extrathyroidal invasion.