The results of recent randomized, controlled trials in patients with chronic kidney disease and anemia have suggested that hyporesponsiveness to erythropoiesis stimulating agents (ESA) is a significant predictor of poor patient outcomes. Functional iron deficiency (FID) is the most common cause of suboptimal ESA response, and intravenous iron administration (IVFe) efficiently raises hemoglobin (Hb) concentrations even under the condition of FID. Consequently, renal anemia correction has conceptually shifted from 'higher Hb values with high ESA doses' to 'prevention of ESA hyporesponsiveness with IVFe'. The discovery of hepcidin has profoundly changed our understanding of the place of FID in renal anemia therapy. Hepcidin reduces the abundance of iron transport proteins which facilitate iron absorption from the gut and iron mobilization from macrophages. Serum hepcidin is mainly modulated by iron stores, as is serum ferritin. High hepcidin or ferritin levels block intestinal iron absorption and iron recycling in macrophages and decrease iron availability for erythropoiesis, leading to FID. Iron administration, especially IVFe, increases hepcidin levels and concomitantly inhibits iron supply to erythroid cells. This in turn could lead to a vicious circle, exacerbating FID and increasing iron demand. Therefore, physicians should be cautious with unrestricted IVFe to chronic kidney disease patients with FID.