Hereditary hemochromatosis, characterized by iron overload in multiple organs, is one of the most common genetic disorders among Caucasians. Hepcidin, which is synthesized in the liver, plays important roles in iron overload syndromes. Here, we show that a Cre-loxP-mediated liver-specific disruption of SMAD4 results in markedly decreased hepcidin expression and accumulation of iron in many organs, which is most pronounced in liver, kidney, and pancreas. Transcript levels of genes involved in intestinal iron absorption, including Dcytb, DMT1, and ferroportin, are significantly elevated in the absence of hepcidin. We demonstrate that ectopic overexpression of SMAD4 activates the hepcidin promoter and is associated with epigenetic modification of histone H3 to a transcriptionally active form. Moreover, transcriptional activation of hepcidin is abrogated in SMAD4-deficient hepatocytes in response to iron overload, TGF-β, BMP, or IL-6. Our study uncovers a novel role of TGF-β/SMAD4 in regulating hepcidin expression and thus intestinal iron transport and iron homeostasis.