Background: Circular RNA (circRNA) plays a regulatory role in the malignancy of papillary thyroid cancer (PTC). However, the role of a novel circRNA, hsa_circ_0118578, in PTC is not yet fully understood. This report focuses on unveiling hsa_circ_0118578's effect on PTC cell malignancy and reveals its mechanism in PTC progression. Methods: Levels of hsa_circ_0118578 in PTC were assessed by quantitative real-time polymerase chain reaction (qRT-PCR). The functional roles of hsa_circ_0118578 in PTC cell malignancy were evaluated through Transwell, 5-ethynyl-2'-deoxyuridine (EdU), and wound healing assays. A xenograft model in nude mice was used to examine the effects of hsa_circ_0118578's in vivo. The interaction between eukaryotic translation initiation factor 4A3 (EIF4A3) and hsa_circ_0118578 was confirmed using RNA-binding protein immunoprecipitation, qRT-PCR, and western blotting. Results: The hsa_circ_0118578 with high expression in PTC tissues was associated with higher tumor node metastasis stage, lymph node metastasis, as well as poor differentiation. Cell functional assays demonstrated that silencing hsa_circ_0118578 inhibited PTC cell proliferation, invasion, and migration. In the xenograft assay, tumorigenicity of PTC cells in vivo was reduced following hsa_circ_0118578 suppression. Additionally, EIF4A3, as an RNA-binding protein, was shown to interact with hsa_circ_0118578 to stabilize its expression in PTC cells. Conclusions: Upregulated hsa_circ_0118578 in PTC interacts with EIF4A3 to exert oncogenic effects by enhancing hsa_circ_0118578 stability, contributing to PTC development. These findings shed light on the oncogenic role of hsa_circ_0118578 in PTC and suggest it as a potential therapeutic target.