Abstract Background The incidence of Papillary thyroid carcinoma (PTC), the most common type of thyroid malignancy, has risen rapidly worldwide. PTC usually has an excellent prognosis. However, the rising incidence of PTC, due at least partially to widespread use of neck imaging studies with increased detection of small cancers, has created a clinical issue of overdiagnosis, and consequential overtreatment. We investigated how molecular data can be used to develop a prognostics signature for PTC. Methods The Cancer Genome Atlas (TCGA) recently reported on the genomic landscape of a large cohort of PTC cases. In order to decrease unnecessary morbidity associated with over diagnosing PTC patient with good prognosis, we used TCGA data to develop a gene expression signature to distinguish between patients with good and poor prognosis. We selected a set of clinical phenotypes to define an ‘extreme poor’ prognosis group and an ‘extreme good’ prognosis group and developed a gene signature that characterized these. Results We discovered a gene expression signature that distinguished the extreme good from extreme poor prognosis patients. Next, we applied this signature to the remaining intermediate risk patients, and show that they can be classified in clinically meaningful risk groups, characterized by established prognostic disease phenotypes. Analysis of the genes in the signature shows many known and novel genes involved in PTC prognosis. Conclusions This work demonstrates that using a selection of clinical phenotypes and treatment variables, it is possible to develop a statistically useful and biologically meaningful gene signature of PTC prognosis, which may be developed as a biomarker to help prevent overdiagnosis.