Our understanding of how iron transverses the intestinal epithelium has improved greatly in recent years, although the mechanism by which body iron demands regulate this process remains poorly understood. By critically examining the earlier literature in this field and considering it in combination with recent advances we have formulated a model explaining how iron absorption could be regulated by body iron requirements. In particular, this analysis suggests that signals to alter absorption exert a direct effect on mature enterocytes rather than influencing the intestinal crypt cells. We propose that the liver plays a central role in the maintenance of iron homeostasis by regulating the expression of hepcidin in response to changes in the ratio of diferric transferrin in the circulation to the level of transferrin receptor 1. Such changes are detected by transferrin receptor 2 and the HFE/transferrin receptor 1 complex. Circulating hepcidin then directly influences the expression of Ireg1 in the mature villus enterocytes of the duodenum, thereby regulating iron absorption in response to body iron requirements. In this manner, the body can rapidly and appropriately respond to changes in iron demands by adjusting the release of iron from the duodenal enterocytes and, possibly, the macrophages of the reticuloendothelial system. This model can explain the regulation of iron absorption under normal conditions and also the inappropriate absorption seen in pathological states such as hemochromatosis and thalassemia.