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Anemia is prevalent in patients with infections and other inflammatory conditions. Induction of the iron regulatory hormone hepcidin has been implicated in the pathogenesis of anemia of inflammation. This review outlines recent discoveries in understanding how hepcidin and its receptor ferroportin are regulated, how they contribute to anemia of inflammation, and how this knowledge may help guide new diagnostic and therapeutic strategies for this disease.IL-6 is a primary driver for hepcidin induction in many models of anemia of inflammation, but the SMAD1/5/8 pathway also contributes, likely via Activin B and SMAD-STAT3 interactions at the hepcidin promoter. Hepcidin has an important functional role in many, but not all forms of anemia of inflammation, although hepcidin-independent mechanisms also contribute. In certain populations, hepcidin assays may help target therapy with iron or erythropoiesis-stimulating agents to patients who may benefit most. New therapies targeting the hepcidin–ferroportin axis have shown efficacy in preclinical and early clinical studies.Recent studies confirm an important role for the hepcidin–ferroportin axis in the development of anemia of inflammation, but also highlight the diverse and complex pathogenesis of this disorder depending on the underlying disease. Hepcidin-based diagnostic and therapeutic strategies offer promise to improve anemia treatment, but more work is needed in this area.