Background: It is important to understand patient preferences on managing low-risk papillary thyroid cancer (PTC). Methods: We prospectively followed patients with low-risk PTC <2 cm in maximal diameter, who were offered the choice of thyroidectomy or active surveillance (AS) at the University Health Network (UHN), in Toronto, Canada. The primary outcome was the frequency of AS choice (percentage with confidence interval [CI]). Univariate and multivariable analyses were performed to identify predictors of the choice of AS. Results: We enrolled 200 patients of median age 51 years (interquartile range 42-62). The primary tumor measured >1 cm in 55.5% (111/200) of participants. The AS was chosen by 77.5% [71.2-82.7%, 155/200] of participants. In a backwards conditional regression model, the clinical and demographic factors independently associated with choosing AS included: older age (compared with referent group <40 years)-age 40-64 years-odds ratio (OR) 2.78 [CI, 1.23-6.30, p = 0.014], age ≥65 years-OR 8.43 [2.13-33.37, p = 0.002], and education level of high school or lower-OR 4.41 [1.25-15.53, p = 0.021]; AS was inversely associated with the patient's surgeon of record being affiliated with the study hospital-OR 0.29 [0.11-0.76, p = 0.012]. In a separate backwards conditional logistic regression model examining associations with psychological characteristics, AS choice was independently associated with a fear of needing to take thyroid hormones after thyroidectomy-OR 1.24 [1.11-1.39, p < 0.001], but inversely associated with fear of PTC progression-OR 0.94 [0.90-0.98, p = 0.006] and an active coping mechanism ("doing something")-OR 0.43 [0.28-0.66, p < 0.001]. Conclusions: Approximately three-quarters of our participants chose AS over surgery. The factors associated with choosing AS included older age, lower education level, and having a surgeon outside the study institution. Patients' fears about either their PTC progressing or taking thyroid hormone replacement as well as the level of active coping style were associated with the decision. Our results inform the understanding of patients' decisions on managing low-risk PTC. Registration: Clinicaltrials.gov NCT03271892.