Background Papillary thyroid carcinoma (PTC) is the most common pathological type of thyroid cancer. The effect of traditional anti-tumor therapy is not ideal for the patients with recurrence, metastasis and radioiodine resistance. The abnormal expression of immune-related genes (IRGs) has critical roles in the etiology of PTC. However, the effect of IRGs on PTC prognosis remains unclear. Methods Based on The Cancer Genome Atlas (TCGA) and ImmPort databases, we integrated IRG expression profiles and progression-free intervals (PFIs) of PTC patients. First, we identified the differentially expressed IRGs and transcription factors (TFs) in PTC. Subsequently, an IRG model that can predict the PFI was constructed by using univariate Cox regression, least absolute shrinkage and selection operator (LASSO) regression and multivariate Cox regression analyses of the differentially expressed IRGs in the TCGA. Additionally, a protein-protein interaction (PPI) network showed the interactions between the differentially expressed genes (DEGs), and the top 30 genes with the highest degree were extracted from the network. Then, the key IRG was identified by the intersection analysis of the PPI network and univariate Cox regression, which was verified the differential expression of by western blotting and immunohistochemistry (IHC). ssGSEA was performed to understand the correlation between the key IRG expression level and immune activity. Results A total of 355 differentially expressed IRGs and 43 differentially expressed TFs were identified in PTC patients. Then, eight IRGs were finally utilized to construct an IRG model. The respective areas under the curve (AUCs) of the IRG model reached 0.948, 0.820, and 0.831 at 1, 3 and 5 years in the training set. In addition, lactotransferrin (LTF) was determined as the key IRG related to prognosis. The expression level of LTF in tumor tissues was significantly lower than that in normal tissues. And the results of ssGSEA showed the expression level of LTF is closely related to immune activity. Conclusions These findings show that the prognostic model and key IRG may become promising molecular markers for the prognosis of PTC patients.