Thyroid cancer is the most common endocrine cancer, and targeted approaches to treat it pose considerable interest. In this study, we report the discovery of ALK gene mutations in thyroid cancer that may rationalize clinical evaluation of anaplastic lymphoma kinase (ALK) inhibitors in this setting. In undifferentiated anaplastic thyroid cancer (ATC), we identified two novel point mutations, C3592T and G3602A, in exon 23 of the ALK gene, with a prevalence of 11.11%, but found no mutations in the matched normal tissues or in well-differentiated thyroid cancers. These two mutations, resulting in L1198F and G1201E amino acid changes, respectively, both reside within the ALK tyrosine kinase domain where they dramatically increased tyrosine kinase activities. Similarly, these mutations heightened the ability of ALK to activate the phosphatidylinositol 3-kinase (PI3K)/Akt and mitogen-activated protein (MAP) kinase pathways in established mouse cells. Further investigations showed that these two ALK mutants strongly promoted cell focus formation, anchorage-independent growth, and cell invasion. Similar oncogenic properties were observed in the neuroblastoma-associated ALK mutants K1062M and F1174L but not in wild-type ALK. Overall, our results reveal two novel gain-of-function mutations of ALK in certain ATCs, and they suggest efforts to clinically evaluate the use of ALK kinase inhibitors to treat patients who harbor ATCs with these mutations.