Objective: Paired box gene 8/peroxisome proliferator-activated receptor gamma ( PAX8PPAR gamma) translocation is a molecular event associated with follicular thyroid tumorigenesis and is generated by a chromosomal rearrangement between PAX8 and PPAR gamma genes. In this study, we investigated the effects of PAX8PPARg fusion protein on cell growth and on thyroid-specific gene expression in immortalized human thyroid cells (Nthy-ori 3-1). Methods: PAX8PPAR gamma-, PAX8 -, and thyroid transcription factor-1 (TTF-1) - transfected cell culture models; count of live and dead cells; mRNA analysis by reverse transcription-polymerase chain reaction (RT-PCR) and quantitative RT-PCR; and protein analysis by western blotting and gel shift assays. Results: Cells transfected with the PAX8PPARg fusion gene showed higher cell viability at 24, 48, and 72 hours after transfection than cells transfected with control vectors. A PAX8 expression vector increased thyroglobulin (Tg), sodium/iodide symporter (NIS), and thyroid-stimulating hormone ( thyrotropin) receptor (TSHR) mRNA levels in a dose-dependent manner. TTF-1 expression vector promoted a significant increase of Tg mRNA level, but had no effect on NIS and TSHR mRNA levels. PAX8PPARg transfectants presented a significant decrease in TSHR mRNA level compared to empty vector, but had no effect on Tg and NIS mRNA levels. PAX8 plus PAX8PPARg significantly lowered Tg and TSHR mRNA expression levels, but upregulated NIS mRNA level, compared to PAX8 plus control vector. Conclusion: The results obtained with this in vitro system demonstrated that PAX8PPARg increases thyroid cell viability and has opposite effects on thyroid-specific gene expression, suggesting that the presence of this rearrangement may contribute to the malignant transformation of thyroid follicular cells.