SHARP1 is a basic helix-loop-helix transcription factor involved in various cellular processes, including proliferation and differentiation. The present study assessed the role of SHARP1 in the progression and invasion of thyroid cancer. PCR and western blot analysis demonstrated that in thyroid cancer tissues, SHARP1 was significantly downregulated at the mRNA and protein level compared with that in normal tissues. Furthermore, SHARP1 was downregulated in the TT and TPC-1 thyroid cancer cell lines compared with a normal thyroid cell line, while it was upregulated in other thyroid cancer cell lines. Overexpression of SHARP1 in TT and TPC-1 cells significantly inhibited the cell viability, migration and invasion in vitro. Furthermore, the protein and mRNA levels of HIF-1 were found to be decreased in TT and TPC-1 cells following forced overexpression of SHARP1. In addition, silencing of HIF-1 reduced the viability, migration and invasion of TT and TPC-1 cells. In conclusion, the present study indicated that SHARP1 acts as a tumor suppressor in thyroid cancer and that its downregulation may contribute to the proliferation, migration and invasion of thyroid cancer cells through mechanisms possibly involving HIF-1, suggesting that SHARP1 may be an important therapeutic target for the treatment of thyroid cancer.