BACKGROUND: Patients with radioactive iodine ((131)I)-refractory locally advanced or metastatic differentiated thyroid cancer have a poor prognosis because of the absence of effective treatment options. In this study, we assessed the efficacy and safety of orally administered sorafenib in the treatment of patients with this type of cancer. METHODS: In this multicentre, randomised, double-blind, placebo-controlled, phase 3 trial (DECISION), we investigated sorafenib (400 mg orally twice daily) in patients with radioactive iodine-refractory locally advanced or metastatic differentiated thyroid cancer that had progressed within the past 14 months. Adult patients (≥18 years of age) with this type of cancer were enrolled from 77 centres in 18 countries. To be eligible for inclusion, participants had to have at least one measurable lesion by CT or MRI according to Response Evaluation Criteria In Solid Tumors (RECIST); Eastern Cooperative Oncology Group performance status 0-2; adequate bone marrow, liver, and renal function; and serum thyroid-stimulating hormone concentration lower than 0·5 mIU/L. An interactive voice response system was used to randomly allocate participants in a 1:1 ratio to either sorafenib or matching placebo. Patients, investigators, and the study sponsor were masked to treatment assignment. The primary endpoint was progression-free survival, assessed every 8 weeks by central independent review. Analysis was by intention to treat. Patients in the placebo group could cross over to open-label sorafenib upon disease progression. Archival tumour tissue was examined for BRAF and RAS mutations, and serum thyroglobulin was measured at baseline and at each visit. This study is registered with ClinicalTrials.gov, number NCT00984282, and with the EU Clinical Trials Register, number EudraCT 2009-012007-25. FINDINGS: Patients were randomly allocated on a 1:1 basis to sorafenib or placebo. The intention-to-treat population comprised 417 patients (207 in the sorafenib group and 210 in the placebo group) and the safety population was 416 patients (207 in the sorafenib group and 209 in the placebo group). Median progression-free survival was significantly longer in the sorafenib group (10·8 months) than in the placebo group (5·8 months; hazard ratio [HR] 0·59, 95% CI 0·45-0·76; p<0·0001). Progression-free survival improved in all prespecified clinical and genetic biomarker subgroups, irrespective of mutation status. Adverse events occurred in 204 of 207 (98·6%) patients receiving sorafenib during the double-blind period and in 183 of 209 (87·6%) patients receiving placebo. Most adverse events were grade 1 or 2. The most frequent treatment-emergent adverse events in the sorafenib group were hand-foot skin reaction (76·3%), diarrhoea (68·6%), alopecia (67·1%), and rash or desquamation (50·2%). INTERPRETATION: Sorafenib significantly improved progression-free survival compared with placebo in patients with progressive radioactive iodine-refractory differentiated thyroid cancer. Adverse events were consistent with the known safety profile of sorafenib. These results suggest that sorafenib is a new treatment option for patients with progressive radioactive iodine-refractory differentiated thyroid cancer. FUNDING: Bayer HealthCare Pharmaceuticals and Onyx Pharmaceuticals (an Amgen subsidiary).