We report herein a case of papillary carcinoma which appeared to transform into anaplastic carcinoma during postoperative radioactive iodine-131 (131I) therapy. A 67-year-old man who was diagnosed as having papillary thyroid carcinoma with bilateral neck lymph node involvement and multiple lung metastases underwent total thyroidectomy prior to 131I therapy. Immediately after a second course of 131I therapy, the patient complained of right neck pain and swelling, and a biopsy of the swollen neck lymph node was taken. Histologic examination of this biopsy specimen revealed anaplastic carcinoma. With p53 immunohistochemical staining, both the primary tumor and the biopsy specimen were positive. We speculate that first, some DNA damage in tumor cells was induced by the initial 131I therapy, but neither DNA repair nor cell apoptosis occurred because the p53 gene was already mutated; then further DNA damage was induced by the second 131I therapy, leading to anaplastic transformation.