Immunosuppressive lymphocytes, such as regulatory T cells (Tregs) and plasmacytoid dendritic cells (pDCs), play crucial roles in tumor escape. To investigate the roles of Tregs and pDCs in papillary thyroid cancer (PTC) plus multinodular non-toxic goiter (MNG), thyroid tissue and blood samples from 30 patients with PTC plus MNG and 30 MNG alone were analyzed for CD4(+) T cell, CD8(+) T cell, FoxP3(+) Treg, ICOS(+)FoxP3(+) Treg, and pDC numbers by immunohistochemistry (IHC), immunofluorescence, and flow cytometry. Plasma concentration of the cytokines interleukin 10 (IL-10) and transforming growth factor β (TGF-β) were measured by enzyme-linked immunosorbent assay as well. Both in thyroid tissue and peripheral blood, the numbers of Foxp3(+) Treg were significantly higher in patients with PTC plus MNG compared to patients with MNG alone; and as a prognostic marker, ICOS(+)Foxp3(+) Tregs represent a stronger predictor of disease progression than the total numbers of Foxp3(+) Tregs. Furthermore, a positive correlation between pDC and ICOS(+)Foxp3(+) Treg numbers in tissue of patients with PTC plus MNG was observed, suggesting that PTC-derived pDCs may induce the differentiation of naive CD4(+) T cells into ICOS(+)Foxp3(+)Tregs. This may be one of the mechanisms underlying tumor escape in PTC plus MNG patients. Our results suggest that Tregs and pDCs together contribute to the tumor escape in patients with PTC plus MNG.