AbstractIron is an essential nutrient that is potentially toxic due to its redox reactivity. Insufficient iron supply to erythroid cells, the major iron consumers in the body, leads to various forms of anemia. On the other hand, iron overload (hemochromatosis) is associated with tissue damage and diseases of liver, pancreas, and heart. Physiological iron balance is tightly controlled at the cellular and systemic level by iron regulatory proteins (IRP1, IRP2) and the iron regulatory hormone hepcidin, respectively. Underlying mechanisms often intersect to achieve optimal iron utilization, to control immune responses, and to prevent iron toxicity. This review focuses on systemic iron homeostasis in the context of erythropoiesis, a highly iron‐demanding process. We discuss the function and regulation of hepcidin by various stimuli, and highlight hepcidin‐dependent and ‐independent mechanisms that link iron utilization with maturation of erythroid progenitor cells. © 2017 IUBMB Life, 69(6):399–413, 2017