Although the vast majority of patients with papillary thyroid cancer (PTC) have a favorable prognosis when conventional treatments are implemented, local recurrence and distant metastasis of advanced PTCs still hamper the survival and clinical management in certain patients. As immune checkpoint blockade (ICB) therapy achieves a great success in some advanced cancers, we aimed to investigate the immune landscape in PTC and its potential implications for prognosis and immunotherapy. In this study, different algorithms were conducted to estimate immune infiltration in PTC samples. A series of bioinformatic and machine learning approaches were performed to identify PTC-specific immune-related genes (IRGs) and distinct immune clusters. Differences in intrinsic tumor immunogenicity and potential immunotherapy response were observed between distinct immune clusters. A prognostic immune-related signature (IRS) was established to predict progression-free survival (PFS). IRS exhibited more powerful prognostic capacity and accurate survival prediction compared to conventional clinicopathological features. Furthermore, an integrated survival decision tree and a scoring nomogram were constructed to improve prognostic stratification and predictive accuracy for individual patients. In addition, altered pathways, mutational patterns, and potential applicable drugs were analyzed in different immune-related risk groups. Our study gained some insight into the immune landscape of PTC, and provided some useful clues for introducing immune-based molecular classification into risk stratification and guiding ICB decision-making.