Most thyroid nodules can be diagnosed preoperatively by ultrasonography and fine-needle aspiration biopsy. However, accurately differentiating between benign nodules or indolent thyroid tumors and aggressive thyroid cancers remains a significant clinical challenge when the biopsy results are indeterminate. In this study, we aim to explore a novel biomarker to determine the malignancy of thyroid nodules. Fifteen tissue samples from patients with Stage I&II papillary thyroid carcinoma (PTC) and benign thyroid nodule (BTN) were analyzed by EPIC Methylation 850 K and RNA-Sequencing. Altered and inversely correlated methylation and expression in SERPINA1 gene in PTC was found in the discovery study. PTC-associated SERPINA1 hypomethylation was further verified by mass spectrometry in case-control studies from two clinical centers (Validation I: 140 PTCs vs. 182 BTNs, ORs ≥ 2.48, and Validation II: 224 PTCs vs. 217 BTNs, ORs ≥ 2.04; P ≤ 3.07E-15, for all measurable CpG sites). Moreover, SERPINA1 methylation had an outstanding clinical application value to differentiate PTC from BTN (the AUC combining Validation I and Validation II was 0.92). Our study also revealed that the upregulated SERPINA1 could promote cell proliferation, migration and invasion in the PTC cell lines, and thereby facilitate the malignant progression of PTC. Mechanistically, SERPINA1 activated the AKT/mTOR pathway via binding to MAPK6. Intervention targeting either SERPINA1 or MAPK6 has a significant impact on the malignancy of PTC cells. Together, we identified SERPINA1 methylation as a functional and effective diagnostic marker for PTC and provided a novel epigenetic insight into the etiology of PTC.