The peptide hormone hepcidin is the principal regulator of systemic iron homeostasis. We examined the pathway by which iron stimulates the production of hepcidin. In humans who ingested 65 mg of iron, the increase in transferrin saturation preceded by hours the increase in urinary hepcidin excretion. Increases in urinary hepcidin concentrations were proportional to the increment in transferrin saturation. Paradoxically, in previous studies in primary hepatocytes and cell lines, hepcidin response to iron or iron transferrin was not observed. We now report that freshly isolated murine primary hepatocytes responded to holotransferrin but not apotransferrin by increasing hepcidin mRNA. Hepcidin increase was not due to contamination of the transferrin preparations by endotoxin, a potent pathologic stimulus of hepcidin synthesis. Using this culture system, we showed that holotransferrin concentrations regulate hepcidin mRNA concentrations through a hemojuvelin/BMP2/4-dependent pathway. Although BMP9 is known to be expressed in the liver and potently increased the basal concentrations of hepcidin mRNA, it did not interact with hemojuvelin, and interference with its signaling pathway did not affect iron regulation. Fresh primary hepatocytes constitute a sufficient system for the regulation of hepcidin by physiologic iron stimuli and will greatly facilitate studies of major disorders of iron homeostasis.