Hepcidin is a cytokine-induced antibacterial protein which is produced in the liver, circulates in the blood, and is excreted in the urine. It is a major regulator of iron balance in the intestinal mucosa, and appears to have a significant role in the pathogenesis of haemochromatosis and related disorders. Hepcidin appears to be a major contributor to the hypoferraemia associated with inflammation. Serum ferritin concentration is strongly correlated with hepcidin protein levels in either urine or serum, and certain patients with hepatic adenomas exhibit a microcytic, hypoferraemic hepcidin-dependent anaemia. For these reasons, it has been proposed that hepcidin is a primary factor in the pathogenesis of the anaemia of chronic disease (ACD), a cytokine-mediated anaemia commonly encountered in clinical practice and characterized by hypoferraemia with adequate reticuloendothelial iron stores. However, the pathogenetic basis of ACD is not entirely due to changes in iron metabolism, but also involves abnormalities in red cell survival and the erythropoietic response to anaemia. In this review, the evidence for involvement of hepcidin as a major mediator of ACD is evaluated. Hepcidin appears to be a major factor in the systemic iron abnormalities seen in ACD; whether it contributes to the other aspects of the pathogenesis of the syndrome requires further investigation.