Abstract Context Dipeptidyl peptidase IV (DPP4) is overexpressed in thyroid cancer and certain malignancies. Furthermore, DPP4 has been identified as a discriminatory marker for thyroid cancer. However, it remains unclear whether DPP4 expression plays a prognostic role. Objective The aim of this study was to investigate the expression and function of DPP4 in thyroid cancer and the mechanisms involved. Design We determined the expression of DPP4 by immunohistochemistry in tissue microarrays of thyroid tumors. In vitro functional studies were performed after genetic and pharmacological inhibition of DPP4. Gene expression and pathway analyses were used to identify downstream targets. The therapeutic potential of DPP4 inhibition was evaluated in a mouse xenograft model. Results High DPP4 expression was associated with extrathyroidal extension (P < 0.001), BRAF mutation (P < 0.001), and advanced tumor stage (P = 0.007) in papillary thyroid cancer. Patients in the high–DPP4 expression group were less likely to be classified as having no evidence of disease at final follow-up (P = 0.042). DPP4 silencing or treatment with DPP4 inhibitors significantly suppressed colony formation, cell migration, and invasion. Analysis of differentially expressed genes after DPP4 knockdown suggested that the transforming growth factor-β signaling pathway is involved. In vivo experiments revealed that sitagliptin treatment reduced tumor growth and xenograft transforming growth factor-β receptor I expression. Conclusions Increased DPP4 expression is associated with cellular invasion and more aggressive disease in papillary thyroid cancer. Targeting DPP4 may be a therapeutic strategy for DPP4-expressing thyroid cancer. We studied DPP4 expression in thyroid tumors and found that DPP4 upregulation is associated with more advanced papillary thyroid cancer and may be a prognostic marker and therapeutic target.