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Iron is necessary for physiological processes essential for athletic performance, such as oxygen transport, energy production, and cell division. However, an excess of “free” iron is toxic because it produces reactive hydroxyl radicals that damage biological molecules, thus leading to cell and tissue injury. Therefore, iron homeostasis is strictly regulated; and in recent years, there have been important advancements in our knowledge of the underlying processes. Hepcidin is the central regulator of systemic iron homeostasis and exerts its function by controlling the presence of the iron exporter ferroportin on the cell membrane. Hepcidin binding induces ferroportin degradation, thus leading to cellular iron retention and decreased levels of circulating iron. As iron is required for hemoglobin synthesis, the tight link between erythropoiesis and iron metabolism is particularly relevant to sports physiology. The iron needed for hemoglobin synthesis is ensured by inhibiting hepcidin to increase ferroportin activity and iron availability and hence to make certain that efficient blood oxygen transport occurs for aerobic exercise. However, hepcidin expression is also affected by exercise-associated conditions, such as iron deficiency, anemia or hypoxia, and, particularly, inflammation, which can play a role in the pathogenesis of sports anemia. Here, we review recent advances showing the relevance of iron for physical exercise and athletic performance. Low body iron levels can cause anemia and thus limit the delivery of oxygen to exercising muscle, but tissue iron deficiency may also affect performance by, for example, hampering muscle oxidative metabolism. Accordingly, a hemoglobin-independent effect of iron on exercise capacity has been demonstrated in animal models and humans. Here, we review recent advances showing the relevance of iron for physical exercise and athletic performance.