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The prevalence of type 2 diabetes is increasing in epidemic proportions worldwide. Evidence suggests body iron overload is frequently linked and observed in patients with type 2 diabetes. Body iron metabolism is based on iron conservation and recycling by which only a part of the daily need is replaced by duodenal absorption. The principal liver-produced peptide called hepcidin plays a fundamental role in iron metabolism. It directly binds to ferroportin, the sole iron exporter, resulting in the internalization and degradation of ferroportin. However, inappropriate production of hepcidin has been shown to play a role in the pathogenesis of type 2 diabetes mellitus and its complications, based on the regulation and expression in iron-abundant cells. Underexpression of hepcidin results in body iron overload, which triggers the production of reactive oxygen species simultaneously thought to play a major role in diabetes pathogenesis mediated both by β-cell failure and insulin resistance. Increased hepcidin expression results in increased intracellular sequestration of iron, and is associated with the complications of type 2 diabetes. Besides, hepcidin concentrations have been linked to inflammatory cytokines, matriptase 2, and chronic hepatitis C infection, which have in turn been reported to be associated with diabetes by several approaches. Either hepcidin-targeted therapy alone or as adjunctive therapy with phlebotomy, iron chelators, or dietary iron restriction may be able to alter iron parameters in diabetic patients. Therefore, measuring hepcidin may improve differential diagnosis and the monitoring of disorders of iron metabolism.