Hepcidin is a recently discovered peptide made in the liver, distributed in plasma and excreted in urine. This peptide hormone is the homeostatic regulator of intestinal iron absorption, iron recycling by macrophages, and iron mobilization from hepatic stores. Hepcidin acts by inhibiting the efflux of iron through ferroportin, the sole known iron exporter of enterocytes, macrophages and hepatocytes. As befits an iron-regulatory hormone, hepcidin synthesis is increased by iron loading and decreased by anemia and hypoxia. Hepcidin is markedly induced during infections and inflammation, causing iron to be sequestered in macrophages, hepatocytes and enterocytes. The resulting decrease in plasma iron levels eventually contributes to the anemia associated with infection and inflammation. These alterations in iron metabolism probably have a role in host defense by limiting the availability of iron to invading microorganisms. At the opposite extreme, early studies indicate that hepcidin deficiency--due to the dysregulation of its synthesis or mutations in the hepcidin gene itself--is the immediate cause of most forms of hemochromatosis.