Both cellular iron deficiency and excess have adverse consequences. To maintain iron homeostasis, complex mechanisms have evolved to regulate cellular and extracellular iron concentrations. Extracellular iron concentrations are controlled by a peptide hormone hepcidin, which inhibits the supply of iron into plasma. Hepcidin acts by binding to and inducing the degradation of the cellular iron exporter, ferroportin, found in sites of major iron flows: duodenal enterocytes involved in iron absorption, macrophages that recycle iron from senescent erythrocytes, and hepatocytes that store iron. Hepcidin synthesis is in turn controlled by iron concentrations, hypoxia, anemia and inflammatory cytokines. The molecular mechanisms that regulate hepcidin production are only beginning to be understood, but its dysregulation is involved in the pathogenesis of a spectrum of iron disorders. Deficiency of hepcidin is the unifying cause of hereditary hemochromatoses, and excessive cytokine-stimulated hepcidin production causes hypoferremia and contributes to anemia of inflammation.