Hemochromatosis is caused by mutations in HFE, a protein that competes with transferrin (TF) for binding to transferrin receptor 1 (TFR1). We developed mutant mouse strains to gain insight into the role of the Hfe/Tfr1 complex in regulating iron homeostasis. We introduced mutations into a ubiquitously expressed Tfr1 transgene or the endogenous Tfr1 locus to promote or prevent the Hfe/Tfr1 interaction. Under conditions favoring a constitutive Hfe/Tfr1 interaction, mice developed iron overload attributable to inappropriately low expression of the hormone hepcidin. In contrast, mice carrying a mutation that interferes with the Hfe/Tfr1 interaction developed iron deficiency associated with inappropriately high hepcidin expression. High-level expression of a liver-specific Hfe transgene in Hfe^−/− mice was also associated with increased hepcidin production and iron deficiency. Together, these models suggest that Hfe induces hepcidin expression when it is not in complex with Tfr1.