We report the generation of a tetracycline-regulated (Tet ON) transgenic mouse model for acute and chronic expression of the iron regulatory peptide hepcidin in the liver. We demonstrate that short-term and long-term tetracycline-dependent activation of hepcidin in adult mice leads to hypoferremia and iron-limited erythropoiesis, respectively. This clearly establishes the key role of hepcidin in regulating the extracellular iron concentration. We previously demonstrated that, when expressed early in fetal development, constitutive transgenic hepcidin expression prevented iron accumulation in an Hfe^-/- mouse model of hemochromatosis. We now explore the effect of chronic hepcidin expression in adult Hfe^-/- mice that have already developed liver iron overload. We demonstrate that induction of chronic hepcidin expression in 2-month-old Hfe^-/- mice alters their pattern of cellular iron accumulation, leading to increased iron in tissue macrophages and duodenal cells but less iron in hepatocytes. These hepcidin-induced changes in the pattern of cellular iron accumulation are associated with decreased expression of the iron exporter ferroportin in macrophages but no detectable alteration of ferroportin expression in the hepatocytes. We speculate that this change in iron homeostasis could offer a therapeutic advantage by protecting against damage to parenchymal cells.