Multinucleated giant cells (MGCs) are often detected in cases of papillary thyroid carcinoma (PTC). Their origin and significance, however, has not been established. One possibility is that they form in response to injury induced by fine needle aspiration biopsy (FNAB). Other hypotheses are that the chemically-altered colloid produced by PTC induces MGCs to act as colloidophages, or else MGCs are a non-specific immune response ingesting neoplastic follicle cells. We assigned 172 cases of PTC a semi-quantitative score for MGCs. Cases with “many” MGCs were immunohistochemically stained for AEI/AEIII, CD68, and CD163 to assess for epithelial vs histiocytic differentiation, and for thyroglobulin and TTF-1 to assess for MGC ingestion of colloid or thyroid follicle cells respectively. Overall, we identified MGCs in 100/172 (58.1%) PTC specimens; in 45 (26.2%), “many” MGCs were found, while in 55 (31.9%) MGCs were “few.” The mean sizes of PTC in cases with many as opposed to rare/no MGCs was 2.50 cm vs 1.8 [P = 0.003]. The cases of PTC with many MGCs had higher multifocality (26/45 vs 51/127 [P = 0.06]), extrathyroidal extension (21/45 vs 36/127 [P = 0.03]), and recurrence (8/45 vs 9/127 [P = 0.08]), than did cases with rare or no MGCs. The majority of patients both with and without numerous MGCs had previous histories of FNA or hemilobectomy: 40/45 and 99/127 respectively (P = 0.062). The majority of MGCs were positive for CD68 (45/45), CD163 (44/45), thyroglobulin (34/45) and negative for AEI/AEIII (44/45) and TTF-1 (44/45). These results indicate that MGCs in PTC are of histiocytic origin. Cases of PTC with many MGCs have a significantly greater likelihood of extrathyroidal extension and greater tumor size than cases with few/no MGCs. MGCs appear to be functioning largely as colloidophages.