We evaluated the occurrence, tissue distribution, and prognostic value of tumor-associated macrophages in 121 papillary thyroid carcinomas using immunohistochemical staining with anti-CD68 antibody in archival paraffin-embedded sections. Lymphocytic infiltration and dendritic cell presence were also evaluated. Three groups were identified according to the presence and characteristics of macrophages: 1) tumors without evidence of infiltrating macrophages: (n = 35); 2) tumors with infiltrating macrophages but no evidence of neoplastic cells phagocytosis (n = 68); and 3) tumors with infiltrating macrophages and in situ evidence of active neoplastic cell phagocytosis (n = 18). Neoplastic cell phagocytosis by macrophages was positively correlated with both lymphocytic infiltration and dendritic cells (P = 0.0000), whereas it was negatively correlated with vascular invasion (P = 0.0032). Distant metastases developed in none of the 18 tumors with neoplastic cell phagocytosis, but occurred in 15 of 103 of the remaining tumors (P = 0.0647) and were significantly and negatively associated with lymphocytic infiltration or dendritic cells. The present study indicates, therefore, that immune reaction, involving neoplastic cell phagocytosis by macrophages and lymphocytic infiltration, plays a role in the development of distant metastases in patients with papillary thyroid cancer.