Evidence from observational studies suggest a positive association between serum thyroid-stimulating hormone (TSH) levels and differentiated thyroid carcinoma. However, the cause–effect relationship is poorly understood and these studies are susceptible to bias and confounding. This study aimed to investigate the causal role of TSH in both benign thyroid nodules and thyroid cancer in up to 451,025 UK Biobank participants, using a genetic technique, known as Mendelian randomization (MR). Hospital Episode Statistics and Cancer Registry databases were used to identify 462 patients with differentiated thyroid carcinoma and 2031 patients with benign nodular thyroid disease. MR methods using genetic variants associated with serum TSH were used to test causal relationships between TSH and the two disease outcomes. Mendelian randomization provided evidence of a causal link between TSH and both thyroid cancer and benign nodular thyroid disease. Two-sample MR suggested that a 1 s.d. higher genetically instrumented TSH (approximately 0.8 mIU/L) resulted in 4.96-fold higher odds of benign nodular disease (95% CI 2.46–9.99) and 2.00-fold higher odds of thyroid cancer (95% CI 1.09–3.70). Our results thus support a causal role for TSH in both benign nodular thyroid disease and thyroid cancer.