The PAX8/PPARgamma (PPFP) fusion-oncogene is moderately specific for follicular thyroid carcinomas (FTC). It remains unknown whether this can be translated into improved diagnosis, classification, or outcome prediction. We studied a cohort of well-characterized follicular adenomas (FA), FTC, and Hurthle cell carcinomas (HCC) from patients with complete clinical follow-up, to determine whether PPARgamma immunohistochemistry (as a surrogate of PAX8/PPARgamma expression) helps to distinguish FA from FTC and to assess its diagnostic accuracy as an adjunct to frozen section. We also correlated PPARgamma staining with clinical outcomes to assess its role as a prognostic marker.PPARgamma staining was more common in FTC (31 of 54; 57%) than in HCC (one of 23; 4%) or FA (four of 31; 13%) (P < 0.000001). Adjunctive use of PPARgamma immunohistochemistry improved diagnostic sensitivity of intraoperative frozen section from 84% to 96% (P < 0.05) but reduced specificity from 100% to 90% (P < 0.05). PPARgamma staining was associated with favorable prognostic indicators (female gender, better tumor differentiation, and lesser risk of metastases).PPARgamma staining may be helpful in the differential diagnosis of FA, FTC, and HCC, particularly when diagnostic sensitivity of histomorphology is reduced (e.g. during intraoperative frozen section). PPARgamma staining also shows an association with favorable prognosis and may have a role in risk stratification.