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Anaplastic thyroid cancer (ATC) is of the most aggressive thyroid cancer. While ATC is rare, it accounts for a disproportionately high number of thyroid cancer-related deaths. Here, we developed an ATC xenotransplant model in zebrafish larvae, where we can study tumorigenesis and therapeutic response in vivo. Using both mouse (T4888M) and human (C643)-derived fluorescently labeled ATC cell lines, we show these cell lines display different engraftment rates, mass volume, proliferation, cell death, angiogenic potential, and neutrophil and macrophage recruitment and infiltration. Next, using a PIP-FUCCI reporter to track proliferation in vivo, we observed cells in each phase of the cell cycle. Additionally, we performed long-term non-invasive intravital microscopy over 48 h to understand cellular dynamics in the tumor microenvironment at the single-cell level. Lastly, we tested two drug treatments, AZD2014 and a combination therapy of dabrafenib and trametinib, to show our model could be used as an effective screening platform for new therapeutic compounds for ATC. Altogether, we show that zebrafish xenotransplants make a great model to study thyroid carcinogenesis and the tumor microenvironment, while also being a suitable model to test new therapeutics in vivo. [ABSTRACT FROM AUTHOR]