Hereditary hemochromatosis (HH) is a common genetic disorder characterized by excess absorption of dietary iron and progressive iron deposition in several tissues, particularly liver. The vast majority of individuals with HH are homozygous for mutations in the HFE gene. Recently a second transferrin receptor (TFR2) was discovered, and a previously uncharacterized type of hemochromatosis (HH type 3) was identified in humans carrying mutations in the TFR2 gene. To characterize the role for TFR2 in iron homeostasis, we generated mice in which a premature stop codon (Y245X) was introduced by targeted mutagenesis in the murine Tfr2 coding sequence. This mutation is orthologous to the Y250X mutation identified in some patients with HH type 3. The homozygous Tfr2^Y245Xmutant mice showed profound abnormalities in parameters of iron homeostasis. Even on a standard diet, hepatic iron concentration was several-fold higher in the homozygous Tfr2^Y245Xmutant mice than in wild-type littermates by 4 weeks of age. The iron deposition in the mutant mice was predominantly hepatocellular and periportal. The mean splenic iron concentration in the homozygous Tfr2^Y245Xmutant mice was significantly less than that observed in the wild-type mice. The homozygous Tfr2^Y245Xmutant mice also demonstrated elevated transferrin saturations. There were no significant differences in parameters of erythrocyte production including hemoglobin levels, hematocrits, erythrocyte indices, and reticulocyte counts. Heterozygous Tfr2^Y245Xmice did not differ in any measured parameter from wild-type mice. This study confirms the important role for TFR2 in iron homeostasis and provides a tool for investigating the excess iron absorption and abnormal iron distribution in iron-overload disorders.