Hepcidin is a key regulator of systemic iron homeostasis. Hepcidin deficiency induces iron overload, whereas hepcidin excess induces anemia. Mutations in the gene encoding hemojuvelin (HFE2, also known as HJV) cause severe iron overload and correlate with low hepcidin levels, suggesting that hemojuvelin positively regulates hepcidin expression. Hemojuvelin is a member of the repulsive guidance molecule (RGM) family, which also includes the bone morphogenetic protein (BMP) coreceptors RGMA and DRAGON (RGMB). Here, we report that hemojuvelin is a BMP coreceptor and that hemojuvelin mutants associated with hemochromatosis have impaired BMP signaling ability. Furthermore, BMP upregulates hepatocyte hepcidin expression, a process enhanced by hemojuvelin and blunted in Hfe2-/- hepatocytes. Our data suggest a mechanism by which HFE2 mutations cause hemochromatosis: hemojuvelin dysfunction decreases BMP signaling, thereby lowering hepcidin expression.