To explore the effect of radical thyroidectomy with low-transverse arc collar incision in the treatment of thyroid cancer patients and its influence on incision aesthetics. Methods A total of 80 patients with thyroid cancer admitted to our hospital from October 2021 to June 2023 were randomly divided into observation group and control group, with 40 patients in each group. The control group was treated with traditional open surgery, and the observation group was treated with radical thyroidectomy with low-transverse arc collar incision. The thyroid function indexes [thyroid hormone (TSH), free triiodothyronine (FT3), free thyroxine (FT4)], incidence, incision length and treatment satisfaction were compared between the two groups. Results After treatment, the levels of FT3 and FT4 in the two groups were lower than those before operation, the levels of TSH were higher than those before operation, and the levels of FT3 and FT4 in the observation group were lower than those in the control group, and the levels of TSH were higher than those in the control group, the differences were statistically significant (P <0.05). The incidence of complications in the observation group was 5.00%, which was lower than 22.50% in the control group, and the difference was statistically significant (P <0.05). The incision length of the observation group was (4.23±1.38)cm, which was shorter than that of the control group (6.96±1.75)cm, and the difference was statistically significant (P <0.05). The treatment satisfaction of the observation group was 95.00%, which was higher than 80.00% of the control group, and the difference was statistically significant (P <0.05). Conclusion The clinical effect of radical thyroidectomy with low-transverse arc collar incision in the treatment of thyroid cancer is good, which can effectively improve the thyroid function index and reduce the incidence of postoperative complications. At the same time, the surgical incision is short and has a certain cosmetic effect.