Hepcidin is a small disulfide-rich peptide hormone that plays a key role in the regulation of iron homeostasis by binding and mediating the degradation of the cell membrane iron efflux transporter, ferroportin. Since it is a small peptide, chemical synthesis is a suitable approach for the preparation of mature human hepcidin. However, oxidative folding of synthetic hepcidin is extremely difficult due to its high cysteine content and high aggregation propensity. To improve its oxidative folding efficiency, we propose a reversible S-modification approach. Introduction of eight negatively charged sulfonate moieties into synthetic hepcidin significantly decreased its aggregation propensity and, under optimized conditions, dramatically increased the refolding yield. The folded hepcidin displayed a typical disulfide-constrained β-sheet structure and could induce internalization of enhanced green fluorescent protein (EGFP) tagged ferroportin in transfected HEK293 cells. In order to study interactions between hepcidin and its receptor ferroportin, we propose a general approach for site-specific labeling of synthetic hepcidin analogues by incorporation of an l-propargylglycine during chemical synthesis. Following efficient oxidative refolding, a hepcidin analogue with Met20 replaced by l-propargylglycine was efficiently mono-labeled by a red fluorescent dye through click chemistry. The labeled hepcidin was internalized into the transfected cells together with the EGFP-tagged ferroportin, suggesting direct binding between hepcidin and ferroportin. The labeled hepcidin was also a suitable tool to visualize internalization of overexpressed or even endogenously expressed ferroportin without tags. We anticipate that the present refolding and labeling approaches could also be used for other synthetic peptides.