Thyroid cancer is one of the most common malignant tumors of the endocrine system. Among all thyroid cancers, papillary thyroid carcinoma (PTC) is the most common type. The BRAF-activated non-coding RNA (BANCR) is a 693-bp nucleotide transcript which was first identified in melanoma. However, the role of BANCR in the development of thyroid cancer remains unclear. Therefore, the present study investigated the potential involvement of BANCR in the development of thyroid cancer in vitro using patient tissue samples and a panel of thyroid cancer cell lines, and in vivo using a xenograft mouse model. We observed that BANCR was expressed at a higher level in human thyroid tumor tissues than that noted in the adjacent normal tissues. The expression level of BANCR differed between cultured thyroid cancer cell lines; BANCR expression was lower in the BCPAP cell line than that observed in the CAL-62, WRO and FTC-133 cell lines. Western blot analysis and flow cytometry revealed that overexpression of BANCR in the BCPAP cell line resulted in increased expression of the cancer stem cell markers, LGR5 and EpCAM. Single-clone formation experiments showed that upregulated expression of BANCR in the BCPAP cell line promoted an increase in the number of clones formed. Similarly, in microsphere formation experiments, overexpression of BANCR resulted in increased number and size of microspheres compared with the control cell line. Western blotting experiments showed that BANCR overexpression in BCPAP upregulated the expression of phosphorylated c-Raf, MEK1/2 and ERK1/2. Inhibition of c-Raf via U0126 decreased the expression of LGR5 and EpCAM, as well as phosphorylated levels of c-Raf, MEK1/2 and ERK1/2 in the BCPAP cells, compared to levels in the DMSO controls. In the xenograft mouse model, BANCR overexpression in the thyroid cancer cells significantly increased tumor growth. Taken together, these results suggest that BANCR plays a role in PTC development by regulating the expression of cancer stem cell markers LGR5 and EpCAM via the c-Raf/MEK/ERK signaling pathway. Therefore, BANCR may be used as a novel prognostic marker for PTC.