Background: Although in the last decade several studies have addressed the protective role of black and green tea on several diseases, including cancer, there are only few and controversial studies on the effect of tea on benign and malignant thyroid diseases. Methods: An age and gender group matched case-control study conducted in Athens, Greece, was designed. 113 Greek patients with histologically confirmed thyroid cancer and 286 patients with benign thyroid diseases along with 138 healthy controls were interviewed with a pre-structured questionnaire in person by trained interviewers. Results: An inverse association between chamomile tea consumption and benign/malignant thyroid diseases was found (P < 0.001). The odds of chamomile tea consumption, two to six times a week, after controlling for age, gender and BMI, were 0.30 (95% CI: 0.10–0.89) and 0.26 (95% CI: 0.12–0.5) for developing thyroid cancer and benign thyroid diseases, respectively when compared with not consumption. The duration of consumption was also inversely associated with the diseases. Thirty years of consumption significantly reduced the risk of thyroid cancer and benign thyroid diseases development by almost 80%. Similar, although weaker protective association, was found for sage and mountain tea. Adjustment for smoking, alcohol and coffee consumption did not alter the results. Conclusions: Our findings suggest for the first time that drinking herbal teas, especially chamomile, protects from thyroid cancer as well as other benign thyroid diseases.