KAI1 is a metastasis suppressor gene located on human chromosome 11p11.2. Previous studies have shown that the down-regulation of KAI1 mRNA and decreased expression of its gene product are significantly linked to carcinoma progression, including metastatic ability. In this study, we investigated KAI1 protein expression in thyroid neoplasms. KAI1 overexpression was observed in 64.0% of papillary carcinoma cases, and the incidence was significantly higher than in cases of follicular carcinoma (20.0%) (p = 0.0001). In papillary carcinomas, decreased KAI1 expression was frequently observed in cases invading beyond the thyroid capsule (p = 0.001), as well as in lymph node metastases (p = 0.0047) and poorly differentiated lesions (p = 0.0299). Furthermore, in anaplastic carcinoma, the incidence of KAI1 overexpression was lower than in papillary carcinoma (p < 0.0001), and only 4.2% of the cases overexpressed this gene. These results suggest that KAI1 down-regulation is significantly related to the progression of papillary carcinoma, including lymph node metastasis, and its anaplastic transformation.