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The transcription factor Forkhead box E1 (<i>FOXE1</i>) is a key player in thyroid development and function and has been identified by genome-wide association studies as a susceptibility gene for papillary thyroid cancer. Several cancer-associated polymorphisms fall into gene regulatory regions and are likely to affect <i>FOXE1</i> expression levels. However, the possibility that changes in <i>FOXE1</i> expression modulate thyroid cancer development has not been investigated. Here, we describe the effects of <i>FOXE1</i> gene dosage reduction on cancer phenotype in vivo. Mice heterozygous for <i>FOXE1</i> null allele (<i>FOXE1</i>^+/−) were crossed with a <i>BRAF</i>^V600E-inducible cancer model to develop thyroid cancer in either a <i>FOXE1</i>^+/+ or <i>FOXE1</i>^+/− genetic background. In <i>FOXE1</i>^+/+ mice, cancer histological features are quite similar to that of human high-grade papillary thyroid carcinomas, while cancers developed with reduced <i>FOXE1</i> gene dosage maintain morphological features resembling less malignant thyroid cancers, showing reduced proliferation index and increased apoptosis as well. Such cancers, however, appear severely undifferentiated, indicating that <i>FOXE1</i> levels affect thyroid differentiation during neoplastic transformation. These results show that <i>FOXE1</i> dosage exerts pleiotropic effects on thyroid cancer phenotype by affecting histology and regulating key markers of tumor differentiation and progression, thus suggesting the possibility that <i>FOXE1</i> could behave as lineage-specific oncogene in follicular cell-derived thyroid cancer.