The mechanisms that allow the body to sense iron levels in order to maintain iron homeostasis are unknown. Patients with the most common form of hereditary iron overload have mutations in the hereditary hemochromatosis protein HFE. They have lower levels of hepcidin than unaffected individuals. Hepcidin, a hepatic peptide hormone, negatively regulates iron efflux from the intestines into the blood. We report two hepatic cell lines, WIF-B cells and HepG2 cells transfected with HFE, where hepcidin expression responded to iron-loaded transferrin. The response was abolished when endogenous transferrin receptor 2 (TfR2) was suppressed or in primary hepatocytes lacking either functional TfR2 or HFE. Furthermore, transferrin-treated HepG2 cells transfected with HFE chimeras containing only the α3 and cytoplasmic domains could upregulate hepcidin expression. Since the HFE α3 domain interacts with TfR2, these results supported our finding that TfR2/HFE complex is required for transcriptional regulation of hepcidin by holo-Tf.