The BRAF(V600E) mutation is found in approximately 40% of papillary thyroid cancers (PTC). Mice with thyroid-specific expression of Braf(V600E) (TPO-Braf(V600E)) develop PTC rapidly with high levels of serum thyroid-stimulating hormone (TSH). It is unclear to what extent the elevated TSH contributes to tumor progression. To investigate the progression of Braf(V600E)-induced PTC (BVE-PTC) under normal TSH, we transplanted BVE-PTC tumors subcutaneously into nude and TPO-Braf(WT) mice. Regression of the transplanted tumors was observed in both nude and TPO-Braf(WT) mice. They were surrounded by heavy lymphocyte infiltration and oncogene-induced senescence (OIS) was demonstrated by strong β-gal staining and absence of Ki-67 expression. In contrast, BVE-PTC transplants continued to grow when transplanted into TPO-Braf(V600E) mice. The expression of Trp53 was increased in tumor transplants undergoing OIS. Trp53 inactivation reversed OIS and enabled tumor transplants to grow in nude mice with characteristic cell morphology of anaplastic thyroid cancer (ATC). PTC-to-ATC transformation was also observed in primary BVE-PTC tumors. ATC cells derived from Trp53 knockout tumors had increased PI3K/AKT signaling and became resistant to Braf(V600E) inhibitor PLX4720, which could be overcome by combined treatment of PI3K inhibitor LY294002 and PLX4720. In conclusion, BVE-PTC progression could be contained via p53-dependent OIS and TSH is a major disruptor of this balance. Simultaneous targeting of both MAPK and PI3K/AKT pathways offer a better therapeutic outcome against ATC. The current study reinforces the importance of rigorous control of serum TSH in PTC patients.