Iron is an essential component of the erythrocyte protein hemoglobin and is crucial to oxygen transport in vertebrates. In the steady state, erythrocyte production is in equilibrium with erythrocyte removal. In various pathophysiological conditions, however, erythrocyte life span is compromised severely, which threatens the organism with anemia and iron toxicity. Here we identify an on-demand mechanism that clears erythrocytes and recycles iron. We show that monocytes that express high levels of lymphocyte antigen 6 complex, locus C1 (LY6C1, also known as Ly-6C) ingest stressed and senescent erythrocytes, accumulate in the liver via coordinated chemotactic cues, and differentiate into ferroportin 1 (FPN1, encoded by SLC40A1)-expressing macrophages that can deliver iron to hepatocytes. Monocyte-derived FPN1(+)Tim-4(neg) macrophages are transient, reside alongside embryonically derived T cell immunoglobulin and mucin domain containing 4 (Timd4, also known as Tim-4)(high) Kupffer cells (KCs), and depend on the growth factor Csf1 and the transcription factor Nrf2 (encoded by Nfe2l2). The spleen, likewise, recruits iron-loaded Ly-6C(high) monocytes, but these do not differentiate into iron-recycling macrophages, owing to the suppressive action of Csf2. The accumulation of a transient macrophage population in the liver also occurs in mouse models of hemolytic anemia, anemia of inflammation, and sickle cell disease. Inhibition of monocyte recruitment to the liver during stressed erythrocyte delivery leads to kidney and liver damage. These observations identify the liver as the primary organ that supports rapid erythrocyte removal and iron recycling, and uncover a mechanism by which the body adapts to fluctuations in erythrocyte integrity.