MicroRNAs (miRNAs/miRs) are widely dysregulated in papillary thyroid cancer (PTC). Dysregulated miRNAs, together with their target genes, comprise a complex network that has been implicated in the regulation of PTC pathogenesis. Further knowledge of the functional roles of aberrantly expressed miRNAs in PTC, and the underlying molecular mechanisms, may assist in the identification of novel therapeutic targets. miR-766 has been well studied in human cancer; however, the expression status, specific roles and regulatory mechanisms of miR-766 in PTC remain unclear. The present study aimed to detect miR-766 expression in PTC tissues and cell lines, to explore the biological roles of miR-766 in the malignant biological behaviors of PTC cells, and to determine the underlying mechanism of action of miR-766 in PTC cells. The results revealed that miR-766 was downregulated in PTC tissues and cell lines, and its downregulation was strongly associated with TNM stage and lymph node metastasis. Overexpression of miR-766 inhibited PTC cell proliferation, colony formation, migration and invasion, promoted cell apoptosis and reduced tumor growth in vivo. Mechanistically, insulin receptor substrate 2 (IRS2) was identified as a direct target of miR-766 in PTC cells. IRS2 was upregulated in PTC tissues, and this was inversely correlated with miR-766 expression. Inhibition of IRS2 simulated the tumor suppressor activity of miR-766 in PTC cells. Restoration of IRS2 expression negated the tumor-suppressing effects of miR-766 overexpression on PTC cells. Notably, miR-766 directly targeted IRS2 to inhibit activation of the phosphoinositide 3-kinase (PI3K)/protein kinase B (Akt) pathway in PTC cells in vitro and in vivo. Overall, these findings indicated that miR-766 may inhibit the malignant biological behaviors of PTC cells by directly targeting IRS2 and regulating the PI3K/Akt pathway, thus suggesting that this miRNA may be a promising therapeutic target for PTC.