Papillary thyroid cancer (PTC) has seen a worldwide expansion in incidence in the past three decades. Tumor-derived exosomes have been associated with the metastasis of cancer cells and are present within the local hypoxic tumor microenvironment, where they mediate intercellular communication by transferring molecules including microRNAs (miRNAs) between cells. Although miRNAs have been shown to serve as non-invasive biomarkers for cancer diagnosis, the role of hypoxia-induced tumor-derived exosomes in PTC progression remains unclear. Herein, we investigated the differentially expressed miRNA expression profiles from GEO datasets (GSE191117 and GSE151180) by using the DESeq package in R and identified a novel role for miR-221-3p as an oncogene in PTC development. In vivo and in vitro loss and gain assays were used to clarify the mechanism of hypoxic PTC cells derived exosomal-miR-221-3p in PTC. miR-221-3p was upregulated in human PTC plasma exosomes, tissues and cell lines. We found that hypoxic PTC cells derived exosomal-miR-221-3p promoted normoxic PTC cells proliferation, migration, invasion and epithelial-mesenchymal transition (EMT) in vitro, while inhibition of miR-221-3p limited PTC tumor growth in our PTC xenograft model in nude mice. We finally identified ZFAND5, to be a miR-221-3p target. Mechanistically, hypoxic PTC cell lines-derived exosomes carrying miR-221-3p promoted PTC tumorigenesis by regulating ZFAND5. Our findings further the understanding of the underlying mechanisms associated with PTC progression and identify exosomal-miR-221-3p as a potential biomarker for the diagnosis and prognosis of PTC patients. Our study also suggests that miR-221-3p inhibitors could be a potential treatment strategy for PTC.