Inflammation influences iron balance in the whole organism. A common clinical manifestation of these changes is anemia of chronic disease (ACD; also called anemia of inflammation). Inflammation reduces duodenal iron absorption and increases macrophage iron retention, resulting in low serum iron concentrations (hyposideremia). Despite the protection hyposideremia provides against proliferating microorganisms, this “iron withholding” reduces the iron available to maturing red blood cells and eventually contributes to the development of anemia. Hepcidin antimicrobial peptide (Hamp) is a hepatic defensin-like peptide hormone that inhibits duodenal iron absorption and macrophage iron release. Hamp is part of the type II acute phase response and is thought to have a crucial regulatory role in sequestering iron in the context of ACD. Mice with deficiencies in the hemochromatosis gene product, Hfe, mounted a general inflammatory response after injection of lipopolysaccharide but lacked appropriate Hamp expression and did not develop hyposideremia. These data suggest a previously unidentified role for Hfe in innate immunity and ACD.