Interaction of estrogen with iron at the systemic level is long suspected, but direct evidence linking the two is limited. In the present study, we examined the effects of 17β-estradiol (E2) on hepcidin, a key negative regulator of iron absorption from the liver. We found that transcription of hepcidin was suppressed by E2 treatment in human liver HuH7 and HepG2 cells, and this down-regulation was blocked by E2 antagonist ICI 182780. Chromatin immunoprecipitation, deletion, and EMSA detected a functional estrogen responsive element half-site that is located between −2474 and −2462 upstream from the start of transcription of the hepcidin gene. After cloning the human hepcidin promoter into the pGL3Luc-Reporter vector, luciferase activity was also down-regulated by E2 treatment in HepG2 cells. E2 reduced hepcidin mRNA in wild-type mice as well as in hemochromatosis Fe gene knockout mice. In summary, our data suggest that hepcidin inhibition by E2 is to increase iron uptake, a mechanism to compensate iron loss during menstruation. This mechanism may also contribute to increased iron stores in oral contraceptive users.