Background: The American Joint Committee on Cancer (AJCC) T stage for differentiated thyroid cancer (DTC) has limited prognostic stratification capability, and the interaction between extrathyroidal extension (ETE) and tumor size remains inadequately characterized.

Aims: To investigate the interaction between ETE and tumor size and to develop a modified T stage with improved prognostic stratification for DTC.

Study Design: Retrospective, population-based cohort study.

Methods: We analyzed 163,616 patients with DTC from the Surveillance, Epidemiology, and End Results database, divided into development (n = 106,516; 2004-2015) and validation (n = 57,100; 2016-2021) cohorts. Disease-specific survival was the primary outcome. We evaluated the interaction between ETE and tumor size on additive and multiplicative scales and developed a modified T stage using recursive partitioning analysis. Performance assessment included discrimination (C-index), calibration (Brier score), and five standard cancer staging criteria.

Results: Significant positive additive interactions were observed between ETE and tumor size, with relative excess risk due to interaction (RERI) increasing from minimal ETE (MinETE) [RERI = 1.90; 95% confidence interval (CI): 1.02-2.78] to Gross4b ETE (RERI = 6.55; 95% CI: 2.74-10.35). In tumors > 2 cm, MinETE was associated with a 4.58-fold increased risk (95% CI: 3.77-5.55), compared with a 2.34-fold increase (95% CI: 2.05-2.66) in smaller tumors, indicating size-dependent prognostic effects. The modified T stage incorporating these interactions demonstrated improved discrimination (C-index: 0.775; 95% CI: 0.770-0.779) compared with the AJCC 8th edition T stage (C-index: 0.766; 95% CI: 0.761-0.770). This represents a statistically significant but numerically modest improvement, with consistent enhancement across all performance metrics. The modified system also improved prediction of lymph node and distant metastases and provided clearer tumor-node-metastasis stage separation.

Conclusion: The modified T stage incorporating size-dependent effects of ETE was associated with improved prognostic stratification compared with the AJCC 8th edition. These findings support consideration of tumor size-ETE interaction in future staging refinements to enable more precise risk stratification and personalized treatment strategies for patients with DTC. Prospective, multicenter validation is warranted to confirm these findings and evaluate their impact on clinical decision-making.