The role of long noncoding RNA (lncRNA) HOX transcript antisense RNA (HOTAIR) and its functional single nucleotide polymorphisms (SNPs) in papillary thyroid carcinoma (PTC) is still largely unclear. Therefore, we investigated the involvement of lncRNA HOTAIR and its three haplotype-tagging SNPs (htSNPs) in PTC. There was higher expression of HOTAIR in PTC tissues compared to normal tissues. A series of gain-loss assays demonstrated that HOTAIR acts as a PTC oncogene via promoting tumorigenic properties of PTC cells. Additionally, the functional HOTAIR rs920778 genetic variant was a PTC susceptibility SNP. Subjects with the HOTAIR rs920778 TT genotype had an odds ratio (OR) of 1.88, 1.25 and 1.61 (P = 6.0 × 10(-6), P = 0.028 and P = 3.2 × 10(-5)) for developing PTC in Shandong, Jiangsu and Jilin case-control sets compared with subjects with the CC genotype. This statistically significant associations were only found between the rs920778 genetic polymorphism and PTC risk in females but not in males. The allele-specific regulation on HOTAIR expression by the rs920778 SNP was confirmed both in vitro and in vivo. Our results demonstrate that functional SNPs influencing lncRNA regulation may explain a part of PTC genetic basis.