States of chronic inflammation such as inflammatory bowel disease are often associated with dysregulated iron metabolism and the consequent development of an anemia that is caused by maldistribution of iron. Abnormally elevated expression of the hormone hepcidin, the central regulator of systemic iron homeostasis, has been implicated in these abnormalities. However, the mechanisms that regulate hepcidin expression in conditions such as inflammatory bowel disease are not completely understood. To clarify this issue, we studied hepcidin expression in mouse models of colitis. We found that dextran sulfate sodium-induced colitis inhibited hepcidin expression in wild-type mice but upregulated it in IL-10-deficient animals. We identified two mechanisms contributing to this difference. Firstly, erythropoietic activity, as indicated by serum erythropoietin concentrations and splenic erythropoiesis, was higher in the wild-type mice, and pharmacologic inhibition of erythropoiesis prevented colitis-associated hepcidin downregulation in these animals. Secondly, the IL-10 knockout mice had higher expression of multiple inflammatory genes in the liver, including several controlled by STAT3, a key regulator of hepcidin. The results of cohousing and fecal transplantation experiments indicated that the microbiota was involved in modulating the expression of hepcidin and other STAT3-dependent hepatic genes in the context of intestinal inflammation. Our observations thus demonstrate the importance of erythropoietic activity and the microbiota in influencing hepcidin expression during colitis and provide insight into the dysregulated iron homeostasis seen in inflammatory diseases.