<p>Purpose: Thyroid cancer is the most common malignancy of the endocrine system, with a rising global incidence. Radioactive iodine (RAI) therapy with ¹³¹I is used post-surgery to ablate residual thyroid tissue and cancer cells in differentiated thyroid cancer. However, in radioiodine-refractory cases, tumor cells often undergo dedifferentiation and develop RAI resistance, severely limiting therapeutic efficacy. Therefore, elucidating the mechanisms underlying dedifferentiation and developing strategies to restore differentiation have become a hot topic in thyroid cancer research. In this study, a three-dimensional (3D) culture model of TPC-1 thyroid cancer cells was developed using hanging drop and low-adhesion methods to mimic the dedifferentiation process <i>in vitro.</i> Cells cultured under 3D conditions exhibited typical dedifferentiated features, including upregulation of cancer stem cell markers, downregulation of thyroid functional proteins, and impaired radioiodine uptake. Through integrated bioinformatic analysis and immunohistochemical staining of in-house papillary thyroid carcinoma (PTC) samples, we identified transforming growth factor beta 1 (TGF-β1) as a potent inducer of thyroid cancer dedifferentiation. The TGF-β1/Smad signaling pathway was activated in PTC tissues, where it played a critical role in regulating tumor stemness and the expression of iodine-metabolizing proteins. Galunisertib, a TGF-β type I receptor kinase inhibitor, effectively blocked TGF-β1 signaling in spheroids, suppressed cancer stem cell marker expression, and enhanced radioiodine uptake through upregulation of thyroid functional proteins, establishing TGF-β1 as a therapeutic target in thyroid cancer. Collectively, the established 3D culture model serves as a robust platform for investigating dedifferentiation in thyroid cancer and provides a basis for developing novel therapies against radioiodine resistance.</p><p>Plain Language</p>