The iron-regulatory hormone hepcidin has been proposed as the mediator of anemia of inflammation (AI). We examined the acute and chronic effects of hepcidin in the mouse. Injections of human hepcidin (50 μg/mouse), but not of its diluent, induced hypoferremia within 4 hours. To examine the chronic effects of hepcidin, we implanted either tumor xenografts engineered to overexpress human hepcidin or control tumor xenografts into nonobese diabetic-severe combined immunodeficiency (NOD-SCID) mice. Despite abundant dietary iron, mice with hepcidin-producing tumors developed more severe anemia, lower serum iron, and increased hepatic iron compared with mice with control tumors. Hepcidin contributes to AI by shunting iron away from erythropoiesis and sequestering it in the liver, predominantly in hepatocytes. (Blood. 2005;105:1797-1802)