Thyroid cancer is the most common endocrine malignant disease and the incidence is increasing. DACT2 was found frequently methylated in human lung cancer and hepatocellular carcinoma. To explore the epigenetic change and the role of DACT2 in thyroid cancer, 7 thyroid cancer cell lines, 10 cases of non-cancerous thyroid tissue samples and 99 cases of primary thyroid cancer samples were involved in this study. DACT2 was expressed and unmethylated in K1, SW579, FTC-133, TT, W3 and 8505C cell lines. Loss of expression and complete methylation was found in TPC-1 cells. Restoration of DACT2 expression was induced by 5-aza-2'deoxycytidine treatment. It demonstrates that the expression of DACT2 was regulated by promoter region methylation. In human primary papillary thyroid cancer, 64.6% (64/99) was methylated and methylation of DACT2 was related to lymph node metastasis (p<0.01). Re-expression of DACT2 suppresses cell proliferation, invasion and migration in TPC-1 cells. The activity of TCF/LEF was inhibited by DACT2 in wild-type or mutant β-catenin cells. The activity of TCF/LEF was increased by co-transfecting DACT2 and Dvl2 in wild-type or mutant β-catenin cells. Overexpression of wild-type β-catenin promotes cell migration and invasion in DACT2 stably expressed cells. The expression of β-catenin, c-myc, cyclinD1 and MMP-9 were decreased and the level of phosphorylated β-catenin (p-β-catenin) was increased after restoration of DACT2 expression in TPC-1 cells. The expression of β-catenin, c-myc, cyclinD1 and MMP-9 were increased and the level of p-β-catenin was reduced after knockdown of DACT2 in W3 and SW579 cells. These results suggest that DACT2 suppresses human papillary thyroid cancer growth and metastasis by inhibiting Wnt signaling. In conclusion, DACT2 is frequently methylated in papillary thyroid cancer. DACT2 expression was regulated by promoter region methylation. DACT2 suppresses papillary thyroid cancer proliferation and metastasis by inhibiting Wnt signaling.