Papillary thyroid carcinoma (PTC) arises from the thyroid follicular epithelium and represents the most frequent thyroid malignancy. PTC is associated with gene rearrangements generating RET/PTC and TRK oncogenes, and to the BRAFV600E activating point mutation. A role of tumor-suppressor genes in the pathogenesis of PTC has not been assessed yet. The tissue inhibitor of metalloproteinase-3 (TIMP3) gene, encoding a metalloproteinases inhibitor and capable of inhibiting growth, angiogenesis, invasion and metastasis of several cancers, was found to be silenced by promoter methylation in a consistent fraction of PTCs, in association with tumor aggressiveness and BRAFV600E mutation, thus suggesting an oncosuppressor role. To explore this possibility, in this study we performed gene expression and functional studies. Analysis of gene expression data produced in our laboratory as well as meta-analysis of publicly available data sets confirmed the downregulation of TIMP3 gene expression in PTC with respect to normal thyroid. The functional consequences of TIMP3 downregulation were investigated in the PTC-derived NIM1 cell line, in which the expression of TIMP3 is silenced. Restoration of TIMP3 expression by exposure to soluble TIMP3 protein or by complementary DNA transfection had no effect on the growth rate of NIM1 cells. Instead, it affected the adhesive, migratory and invasive capabilities of NIM1 cells by modulating several proteins involved in these processes. A striking effect was observed in vivo, as TIMP3 reduced the tumorigenicity of NIM1 cells by repressing angiogenesis and macrophage infiltration. Our data indicate that the loss of TIMP3 expression exerts a functional role in the pathogenesis of PTC.