Constitutive activation of the RET proto-oncogene in papillary thyroid carcinomas results from rearrangements linking the promoter(s) and N-terminal domains of unrelated genes to the C-terminus of RET tyrosine kinase (RET/PTC). RET/PTC expression has been demonstrated to inhibit transcription of thyroid-specific genes. To study the signal transduction pathways responsible for this, we generated PCCL3 thyroid cells with doxycycline-inducible expression of RET/PTC3, RET/PTC3(Y541F), or PTC2/PDZ. Acute expression of RET/PTC(Y541F) appropriately interacted with Shc, an intermediate in the activation of the Ras pathway, but failed to activate PLCgamma. By contrast, PTC2/PDZ failed to bind Shc, but interacted normally with PLCgamma. Acute expression of RET/PTC3 or RET/PTC3(Y541F), but not PTC2/PDZ, inhibited TSH-induced Tg and NIS expression, suggesting that activation of Shc-Ras, but not PLCgamma, is required for RET/PTC-induced dedifferentiation. Accordingly, acute expression of H-Ras(V12) or of a constitutively active MEK1 also blocked TSH-induced expression of Tg and NIS. Moreover, MEK inhibitors restored Tg and NIS levels. In conclusion, activation of the Ras/Raf/MEK/MAPK pathway through Shc mediates RET/PTC-induced thyroid cell dedifferentiation. This suggests that inhibition of this pathway may promote redifferentiation in poorly differentiated thyroid carcinomas with constitutive activation of either Ras or RET/PTC.