Cellular iron homeostasis is maintained by the coordinate posttranscriptional regulation of genes responsible for iron uptake, release, use, and storage through the actions of the iron regulatory proteins IRP1 and IRP2. However, the manner in which iron levels are sensed to affect IRP2 activity is poorly understood. We found that an E3 ubiquitin ligase complex containing the FBXL5 protein targets IRP2 for proteasomal degradation. The stability of FBXL5 itself was regulated, accumulating under iron- and oxygen-replete conditions and degraded upon iron depletion. FBXL5 contains an iron- and oxygen-binding hemerythrin domain that acted as a ligand-dependent regulatory switch mediating FBXL5's differential stability. These observations suggest a mechanistic link between iron sensing via the FBXL5 hemerythrin domain, IRP2 regulation, and cellular responses to maintain mammalian iron homeostasis.