Iron is essential for the human being, involving in oxygen transport, energy metabolism and DNA synthesis. Iron homeostasis is tightly governed by the hepcidin–ferroportin axis, of which hepcidin is the master regulator. Excess iron is associated with various diseases including osteopenia and osteoporosis, which are closely related to the alternation of the endogenous estrogen level. To verify the biological effect of estrogen on iron metabolism, we established a mouse model of estrogen deficiency by ovariectomy. We demonstrated that the hemoglobin content and serum iron level decreased, whereas the tissue iron level in liver and spleen increased in the ovariectomized mice. Moreover, the transcription of hepatic hepcidin was elevated in ovariectomized mice compared to the control mice. We further demonstrated that there was an estrogen response element (ERE) in the promoter region of the hepcidin gene. The assay using the luciferase reporter system confirmed the existence of a functional ERE in the hepcidin promoter, as the estradiol treatment reduced hepcidin expression in cells transfected with ERE-intact construct, with no response to estradiol in cells transfected with ERE-devoid construct. In conclusion, estrogen greatly contributes to iron homeostasis by regulating hepatic hepcidin expression directly through a functional ERE in the promoter region of hepcidin gene. These findings might help build a better understanding towards the etiology of postmenopausal osteoporosis accompanied by excess tissue iron (such as iron retention of osteoclasts in bone) under estrogen deficiency.