Hepcidin is a beta-defensin-like peptide and a principle regulator of systemic iron homeostasis. In concordance with this dual function its expression is modulated by systemic iron requirements and in response to infectious and inflammatory stimuli. Studies of hepcidin provide novel insight into the molecular mechanisms involved in maintaining iron homeostasis in the healthy state and iron redistribution in response to chronic infections and inflammation. Furthermore, a deregulation of hepcidin may cause elevated intestinal iron absorption that hallmarks a group of frequent iron overload disorders, the Hereditary Hemochromatosis. The aim of this review is to discuss hepcidin function in iron-homeostasis under normal physiological and pathophysiological conditions.