Circular RNAs (circRNAs) are correlated with the occurrence and progression of differentiated thyroid cancer (THCA). However, the regulatory mechanism of circRNAs in differentiated THCA is unclear. In the present study, we analyzed the circRNA microarray dataset (GSE93522) of thyroid tumors and discovered that circRNA HACE1 (circHACE1) was downregulated in differentiated THCA. We detected circHACE1 expression by quantitative real-time polymerase chain reaction (qRT-PCR). Gain-of-function experiments were performed to analyze the biological function of circHACE1 in differentiated THCA cells in vitro. The regulatory mechanism of circHACE1 in differentiated THCA was explored through bioinformatics analysis, dual-luciferase reporter, RIP (RNA immunoprecipitation), and/or RNA pull-down assays. The biological function of circHACE1 in THCA was confirmed by xenograft assay. We verified that circHACE1 was downregulated in differentiated THCA. Also, differentiated THCA patients with low circHACE1 expression were associated with TNM grade, lymphoid node metastasis, tumor size, and poor prognosis. CircHACE1 overexpression decreased xenograft tumor growth in vivo and induced cell cycle arrest, apoptosis, impeded proliferation, migration, and invasion in differentiated THCA cells in vitro. CircHACE1 could function as a microRNA (miR)-346 sponge and regulated Tfcp2L1 (transcription factor CP2 like 1) expression. MiR-346 overexpression offset circHACE1 elevation-mediated effects on malignant behaviors of differentiated THCA cells. Furthermore, Tfcp2L1 silencing counteracted the suppressive impact of miR-346 inhibitor on the malignancy of differentiated THCA cells. In conclusion, circHACE1 adsorbed miR-346 and elevated Tfcp2L1 expression, thus curbing cell malignancy in differentiated THCA, manifesting that circHACE1 might be a target for differentiated THCA treatment.