The reduction of iron is an essential step in the transferrin (Tf) cycle, which is the dominant pathway for iron uptake by red blood cell precursors. A deficiency in iron acquisition by red blood cells leads to hypochromic, microcytic anemia. Using a positional cloning strategy, we identified a gene, six-transmembrane epithelial antigen of the prostate 3 (Steap3), responsible for the iron deficiency anemia in the mouse mutant nm1054. Steap3 is expressed highly in hematopoietic tissues, colocalizes with the Tf cycle endosome and facilitates Tf-bound iron uptake. Steap3 shares homology with F(420)H(2):NADP(+) oxidoreductases found in archaea and bacteria, as well as with the yeast FRE family of metalloreductases. Overexpression of Steap3 stimulates the reduction of iron, and mice lacking Steap3 are deficient in erythroid ferrireductase activity. Taken together, these findings indicate that Steap3 is an endosomal ferrireductase required for efficient Tf-dependent iron uptake in erythroid cells.